“A STUDY OF FINANCIAL PERFORMANCE OF RANNI CO-

OPERATIVE BANK OF PATHANAMTHITTA DISTRICT KERALA”

Internship report submitted in partial fulfilment of the requirement for the award, the degree
of

MASTER OF COMMERCE

BY
Ms. GOWRI PRASAD
Registration Number: P201715

UNDER THE GUIDANCE OF

DR. A VINODAN
(Assistant Professor, Department of Commerce,
Central University of Tamil Nadu)

CENTRAL UNIVERSITY OF TAMIL NADU

(Established by an Act of Parliament 2009)

(संसद द्वारा पाररत अधिधियम 2009 के)
THIRUVARUR, TAMIL NADU-610005
 DECLARATION

I, GOWRI PRASAD hereby declare that the Internship report entitled “A STUDY OF
FINANCIAL PERFORMANCE OF RANNI CO-OPERATIVE BANK OF
PATHANAMTHITTA DISTRICT KERALA” in partial fulfilment of the requirement for
the award of MASTER OF COMMERCE is a record of original internship project done by
me, during the period of study in CENTRAL UNIVERSITY OF TAMILNADU and no part
of it has been submitted for any other degree or diploma.

DATE: 28/09/2021
PLACE: THIRUVARUR Signature of the candidate
 CENTRAL UNIVERSITY OF TAMIL NADU
Thiruvarur
Department of Commerce

This is to certify that the internship report entitled “A STUDY OF FINANCIAL

PERFORMANCE OF RANNI CO-OPERATIVE BANK OF PATHANAMTHITTA
DISTRICT KERALA " is based on the original work done by GOWRI PRASAD

(P201715) in the Department of Commerce, Central University of Tamil Nadu,

Thiruvarur during the academic year 2021 - 2022 and that it has not been/will not
be submitted elsewhere for any other purpose.

DR. A. VINODAN PROF. VELMURUGAN P.S

(Supervisor) (Head of the Department)
 ACKNOWLEDGEMENTS

I am grateful to my guide and express my deepest and sincere thanks to, Dr. A Vinodan,
Assistant Professor in Department of Commerce, Central University of Tamil Nadu, who
helped me from the beginning till the completion of my internship. Without him kind direction
and guidance, this study would have been a little successful.

I would like to say my sincere thanks to Sri. C.N Rajan, secretary of Ranni Service Co-
operative Bank, and other employees for helping me with all the information and guiding me
well even in their busy schedules.

I would like to express my gratitude & respect to [Link] P.S, Head of the
Department, the Department of Commerce, Central University of Tamil Nadu for his support
and advice to complete my report work.

I would also like to thank all my faculty members of the Department of Commerce Central
University of Tamil Nadu for their support incomplete of my internship.

I show my gratitude towards my parents for their moral support and constant encouragement
in this pursuit and I thank the almighty for giving us the strength, knowledge, ability, and
opportunity to completion of this internship.

DATE: 28/09/2021 GOWRI PRASAD

PLACE THIRUVARUR REGISTRATION NO: P201715
 INDEX
PAGE
CHAPTER TITLE
NO.
INTRODUCTION 1-5
1.1 INTRODUCTION 2
1.2 MEANING 2
1.3 IMPORTANCE OF FINANCIAL ANALYSIS 3
I 1.4 TOOLS USED FOR FINANCIAL ANALYSIS 3-5
1.4.1 RATIO ANALYSIS 3-5
1.4.2 COMPARATVIE BALANCE SHEET 5
1.4.3 COMMON SIZE BALANCE SHEET 5
1.4.4 TREND ANALYSIS 5
INDUSTRIAL PROFILE AND COMPANY PROFILE 6-26
2.1 INTRODUCTION TO THE BANKING INDUSTRY 7-15
II
2.2. INTRODUCTION TO BANK PROFILE 16-26

INTERNSHIP METHODOLOGY 27-37

3.1 RESEARCH PROBLEM 27
3.2 OBJECTIVES OF THE STUDY 27
3.3 SCOPE OF THE STUDY 27
3.4 RESEARCH METHODOLOGY 27-28
III
3.5 TOOLS USED FOR FINANCIAL ANALYSIS 29-35
3.6 DATA ANALYSIS TOOLS 36
3.7 LIMITATIONS OF THE STUDY 36
3.8 ANNUAL DATA CONSIDERED FOR THE STUDY 36

DATA ANALYSIS AND INTERPRETATION 37-71

4.1 INTODUCTION 38
4.2 RATIO ANALYSIS 38-53
4.3 COMMON SIZE BALANCE SHEET (2016,2017,2018) 54-56
IV
4.4 COMMON SIZE BALANCE SHEET (2019, 2020) 56-58
4.5 COMPARATIVE BALANCE SHEET 58-68
4.6 TREND ANALYSIS (2016,2017,2018) 69-71
 FINDINGS, RECOMMENDATONS & CONCLUSIONS 72-76
5.1 INTRODUCTION 73
5.2 SUMMARY 73
V 5.3 FINDINGS 73-74
5.4 RECOMMENDATINS 75
5.5 CONCLUSIONS 76

BIBLIOGRAPHY AND APPENDIX

LIST OF TABLE AND GRAPH

TABLE & TITLE PAGE NO.
FIGURE

2.2.6 LIST OF EMPLOYEES 19

2.2.8 LIST OF BOARD OF MEMBERS 20

2.2.9 WORK IN PROGRESS 21

4.1.1 CUREENT ASSET RATIO 38

4.1.2 QUICK RATIO 39

4.1.3 NET WORKING CAPITAL 40

4.1.4 CASH COVERAGE RATIO 41
4.1.5 DEBT-EQUITY RATIO 42

4.1.6 PROPRIETORY RATIO 43

4.1.7 SOLVENCY RATIO 44

4.1.8 FIXED ASSET RATIO 45

4.1.9 FIXED ASSET TO NETWORTH RATIO 46

4.1.10 GROSS PROFIT RATIO 47

4.1.11 NET PROFIT RATIO 48

4.1.12 RETURN ON SHAREHOLDERS’ FUND 49

4.1.13 RETURN ON EQUITY SHARE CAPITAL FUND 50

4.1.14 RETURN ON CAPITAL EMPLOYED 51

4.1.15 INVENTORY TURNOVER RATIO 52

4.1.16 WOKING CAPITAL TURNOVER RATIO 53

4.1.17 COMMON SIZE ANALYSIS (2016,2017,2018) 54-56

4.1.18 COMMON SIZE ANALYSIS (2019,2020) 56-58

4.1.19 COMPARATIVE BALANCE SHEET OF (2016-2017) 58-60

4.1.20 COMPARATIVE BALANCE SHEET (2017-2018) 61-62

4.1.21 COMPARATIVE BALANCE SHEET (2018-2019) 62-64

4.1.22 COMPARATIVE BALANCE SHEET OF (2019-2020) 64-66

4.1.23 TREND ANALYSIS (2016,2017,2018) 66-68

4.1.24 TREND ANALYSIS(2019,2020) 69-71

LIST OF GRAPH

FIGURE TITLE PAGE NO.

4.1.1 CUREENT ASSET RATIO 38

4.1.2 QUICK RATIO 39

4.1.3 NET WORKING CAPITAL 40

4.1.4 CASH COVERAGE RATIO 41

4.1.5 DEBT-EQUITY RATIO 42

4.1.6 PROPRIETORY RATIO 43

4.1.7 SOLVENCY RATIO 44

4.1.8 FIXED ASSET RATIO 45

4.1.9 FIXED ASSET TO NETWORTH RATIO 46

4.1.10 GROSS PROFIT RATIO 47

4.1.11 NET PROFIT RATIO 48

4.1.12 RETURN ON SHAREHOLDERS’ FUND 49

4.1.13 RETURN ON EQUITY SHARE CAPITAL FUND 50

4.1.14 RETURN ON CAPITAL EMPLOYED 51

4.1.15 INVENTORY TURNOVER RATIO 52

4.1.16 WOKING CAPITAL TURNOVER RATIO 53

 CHAPTER I

INTRODUCTION

1
1.1 INTRODUCTION
Financial performance is a subjective measure of how well a firm can use assets from its
primary mode of business and generate revenues. The term is also used as a general measure
of a firm's overall financial health over a given period. Analysts and investors use financial
performance to compare similar firms across the same industry or to compare industries or
sectors in aggregate. Financial analysis is the process of evaluating businesses, projects,
budgets, and other finance-related entities to determine their performance and suitability.
Typically, financial analysis is used to analyze whether an entity is stable, solvent, liquid or
profitable enough to warrant a monetary investment. When looking at a specific company, a
financial analyst analyzes by focusing on the income statement, balance sheet, and cash flow
statement.

Financial analysis is used to evaluate economic trends, set financial policy, build long-term
plans for business activity, and identify projects or companies for investment. This is done
through the synthesis of financial numbers and data. One of the most common ways to analyze
financial data is to calculate ratios from the data to compare against those of other companies
or the company's historical performance. Financial performance analysis is the process of
identifying the financial strengths and weaknesses of the firm by properly establishing the
relationship between the items of the balance sheet and the profit and loss account. The analysis
of a financial statement is a process of evaluating the relationship between the parts of the
financial statement to obtain a better understanding of the firms’ position and performance.
This analysis can be undertaken by the management of the firm or by parties outside the namely
owners, creditors, investors.

1.2 MEANING
Financial performance is a subjective measure of how well a firm can use assets from its primary mode
of business and generate revenues. The term is also used as a general measure of a firm’s overall
financial health over a given period.

Analysis investors use financial performance to compare similar firms across the same industry or to
compare industries or sectors in aggregate.

Financial performance identifies how well a company generates revenues and manages its assets,
liabilities, and the financial interests of its stakeholders.

2
1.3 IMPORTANCE OF FINANCIAL ANLYSIS
➢ Evaluation of past performance of the company.

➢ Assessment of the status of the company.

➢ Prediction of future potential of the company.

➢ Take the right decisions to maximize profits and resources.

➢ Measuring the profitability of the company

➢ Assessing the growth potential of the business.

➢ Comparative position in relation to other firms

➢ Assess the overall financial strength of the company.
➢ Assess the solvency of the firm.

1.4 TOOLS USED FOR FINANCIAL ANALYSIS

Different methods are used to find out the financial position of the company which are given below

➢ Ratio analysis

➢ Trend analysis

➢ Common size balance sheet

➢ Comparative balance sheet

1.4.1 RATIO ANALYSIS

A ratio analysis is a quantitative analysis of information contained in a company’s financial

statements. Ratio analysis is used to evaluate various aspects of a company’s operating and
financial performance such as its efficiency, liquidity, profitability, and solvency. Ratio
analysis is used to evaluate relationships among financial statement items. The ratios are used
to identify trends over time for one company or to compare two or more companies at one point
in time. In this study ratios are classified into three:
➢ Liquidity ratio

➢ Profitability ratio

➢ Efficiency ratio or Activity ratio

➢ Solvency ratio

3
[Link] LIQUIDITY RATIOS

Liquidity ratios analyses the ability of a company to pay off both its current liabilities as they become
due as well as their long-term liabilities as they become current. In other words, these ratios show the
cash levels of a company and the ability to turn other assets into cash to pay off liabilities and other
current obligations. Liquidity is not only a measure of how much cash a business has. It is also a measure
of how easy it will be for the company to raise enough cash or convert assets into cash.

[Link] PROFITABILITY RATIOS

Profitability ratios compare income statement accounts and categories to show a company’s ability to generate
profits from its operations. Profitability ratios focus on a company’s return on investment in inventory and other
assets. These ratios basically show how well companies can achieve profits from their operations. Investors and
creditors can use profitability ratios to judge a company’s return on investment based on its relative level of
resources and assets. In other words, profitability ratios can be used to judge whether companies are making
enough operational profit from their assets. In this sense, profitability ratios relate to efficiency ratios because
they show how well companies are using their assets to generate profits

[Link] EFFICIENCY RATIOS OR ACTIVITY RATIO

Efficiency ratios also called activity ratios measure how well companies utilize their assets to generate
income. Efficiency ratios often look at the time it takes companies to collect cash from a customer or the
time it takes companies to convert inventory into cash—in other words, make sales. These ratios are used
by management to help improve the company as well as outside investors and creditors looking at the
operations of profitability of the company. Efficiency ratios go hand in hand with profitability ratios.

[Link] SOLVENCY RATIO

A solvency ratio is a key metric used to measure an enterprise’s ability to meet its long-term debt
obligations and is used often by prospective business lenders. A solvency ratio indicates whether a
company’s cash flow is sufficient to meet its long-term liabilities and thus is a measure of its financial
health. An unfavourable ratio can indicate some likelihood that a company will default on its debt
obligations. Solvency ratios measure a company’s cash flow, which includes non-cash expenses and
depreciation, against all debt obligations. For instance, consider the debt-to-assets ratio, a popular metric
that measures the degree that a company’s assets are financed by debt, where debt-to-assets equals total

4
assets divided by total debt. Another common solvency ratio, the debt-to-equity (D/E) ratio, shows how
financially leveraged a company is, where debt-to-equity equals total debt divided by total equity.

1.4.2 COMPARATIVE BALANCE SHEET:

A comparative balance sheet presents side-by-side information about an entity's assets,

liabilities, and shareholders' equity as of multiple points in time. the intent is to provide the
reader with a series of snapshots of a company's financial condition over time.

1.4.3 COMMON SIZE ANALYSIS:

Common-size analysis also called vertical analysis converts each line of financial statement
data to an easily comparable, or common-size, amount measured as a percent. This is done by
stating income statement items as a percent of net sales and balance sheet items as a percent of
total assets or total liabilities and shareholders’ equity.

1.4.4 TREND ANALYSIS:

Horizontal analysis (also known as trend analysis) is a financial statement analysis technique
that shows changes in the amounts of corresponding financial statement items over a period. It
is a useful tool to evaluate the trend situations. The statements for two or more periods are used
in the horizontal analysis. The earliest period is usually used as the base period and the items
on the statements for all later periods are compared with items on the statements of the base
period. The changes are generally shown both in dollars and percentage.

5
 CHAPTER II

INDUSTRY PROFILE AND

COMPANY PROFILE

6
 INDUSTRY PROFILE

2.1 INTRODUCTION TO THE BANKING INDUSTRY

The bank introduced with the primary of its kind banks of merchants of the earliest world that
created grain loans to agriculturist and businesspeople those who were carrying product
between cities. This gets started about 2000 before Christ in Assyria and Chaldea. After that in
the ancient Balkan state and through the empire, lenders based mostly in temples created loans
and additional two vital innovations: they have accepted deposits and adjusted cash.
Archaeology during this era in ancient China and India conjointly shows the proof of funds
loaning behavior.

Numerous histories recognize the crucial past development of a saving money framework to
medieval and Renaissance Italy and essentially the well-off urban communities of Florence,
Venice, and Genoa. The Bardi and Peruzzi families oppressed keeping money in fourteenth-
century Florence, building up branches in numerous other pieces of Europe.

2.1.2 ORIGIN OF THE WORD ‘BANK’:

The banking activities were stared in different periods in different countries, there is no
unanimous view regarding the origin of the word ‘Bank’. The word bank is said to be
derived from the French word ‘Banco (or) Banches (or) Bane (or) Banque which means a
bench. Anothercommon view that the bank might be originated from the German word’
Bank’ which means a joint stock fund. In due course it was italianated into ‘bank’ and
finally anglicized into ‘bank’. The view is most relevant even today.

2.1.3 MEANING OF BANK:

A bank is an institution, which deals in money it means that a bank receives money in
the formof deposits from the public and lends money for the development of trade and
commerce.

2.1.4 DEFINITION OF BANK:

The Indian bank regulation act of 1949 defines the term bank as “the accepting for the
purpose of investment of deposit of money from the public, repayable on demand or
otherwise and drawl bycheque, draft and order (or) otherwise”.

7
2.1.5 EVOLUTION OF MODERN BANKING:
Finance imports and exports. They deal with bills of exchange. Bill of lading, and Railway
receipts, marine insurance policies and so on banks letter of credits, travelers’ cheque,
circular notes to customer. They assist industrial undertaking by providing working capital
and fixed capital requirements.

2.1.6 ANCESTORS OF MODERN BANKS:

Modern banks have three ancestors: the growth of banking in England in the nineteenth
century paved way for the establishment of systematized banking system in the world.
Banks were performed limited functions in past such as receiving deposits and issuing
notes in the country. As time advanced it deals with many services to the customers.

2.1.7 INTRODUCTION TO BANKING IN INDIA

Banking in India in the modern sense has originated in the last decades of the 18th century.
The first banks were Bank of Hindustan (1770-1829) and The General Bank of India,
established 1786 and since defunct.

The largest bank, and the oldest still in existence, is the State Bank of India, which originated
in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal.
This was one of the three presidency banks, the other two being the Bank of Bombay and
the Bank of Madras, all three of which were established under charters from the British East
India Company. The three banks merged in 1921 to form the Imperial Bank of India, which,
upon India's independence, became the State Bank of India in 1955. For many years the
presidency banks acted as quasi-central banks, as did their successors, until the Reserve Bank
of India was established in 1935.

[Link] NATIONALISATON (1960S)

Despite the provisions, control and regulations of Reserve Bank of India, banks in India except
the State Bank of India or SBI, continued to be owned and operated by private persons. By the

8
1960s, the Indian banking industry had become an important tool to facilitate the development
of the Indian economy. At the same time, it had emerged as a large employer, and a debate had
ensued about the nationalization of the banking industry.

The Government of India issued an ordinance ('Banking Companies (Acquisition and Transfer
of Undertakings) Ordinance, 1969')) and nationalized the 14 largest commercial banks with
effect from the midnight of 19 July 1969. These banks contained 85 percent of bank deposits
in the country. Within two weeks of the issue of the ordinance, the Parliament passed the
Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received
the presidential approval on 9 August 1969.

[Link] LIBERALISATION (1990S)

In the early 1990s, the then government embarked on a policy of liberalization, licensing a
small number of private banks. These came to be known as New Generation tech-savvy banks,
and included Global Trust Bank (the first of such new generation banks to be set up), which
later amalgamated with Oriental Bank of Commerce, UTI Bank (since renamed Axis
Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy
of India, revitalized the banking sector in India, which has seen rapid growth with strong
contribution from all the three sectors of banks, namely, government banks, private banks and
foreign banks.

[Link] CURRENT PERIOD

By 2010, banking in India was generally mature in terms of supply, product range and reach-
even though reach in rural India remains a challenge for the private sector and foreign banks.
The Reserve Bank of India is an autonomous body, with minimal pressure from the
government. The stated policy of the Bank on the Indian Rupee is to manage volatility but
without any fixed exchange rate.

2.1.8 CLASSIFICATION OF BANKS

Banks can be classified into various types. Given below are the bank types in India: -
➢ Central Bank

➢ Cooperative Banks

9
 ➢ Commercial Banks

➢ Regional Rural Banks (RRB)

➢ Local Area Banks (LAB)

➢ Specialized Bank

➢ Small Finance Banks

➢ Payments Banks

➢ CENTRAL BANK

Central banks are bankers’ banks, and these banks trace their history from the Bank of England.
They guarantee stable monetary and financial policy from country to country and play an
important role in the economy of the country. Typical functions include implementing
monetary policy, managing foreign exchange and gold reserves, making decisions regarding
official interest rates, acting as banker to the government and other banks, and regulating and
supervising the banking industry.

➢ COOPERATIVE BANKS

These banks are organized under the state government’s actions. They give short-term loans to
the agriculture sector and other allied activities.

The main goal of Cooperative Banks is to promote social welfare by providing

concessional loans They are organized in the 3-tier structure

➢ Tier 1 (State Level) – State Cooperative Banks (regulated by RBI, State Govt, NABARD)

➢ Tier 2 (District Level) – Central/District Cooperative Banks

➢ Tier 3 (Village Level) – Primary Agriculture Cooperative Banks

➢ COMMERCIAL BANK
➢ Organized under the Banking Companies Act, 1956
➢ They operate on a commercial basis and its main objective is profit They have
a unified structure and are owned by the government, state, or any private entity.
➢ They tend to all sectors ranging from rural to urban

10
 ➢ These banks do not charge concessional interest rates unless instructed by the
RBI
➢ Public deposits are the main source of funds for these banks

The commercial banks can be further divided into three categories:

1. Public sector Banks – A bank where the majority stakes are owned by the
Government or the central bank of the country.
2. Private sector Banks – A bank where the majority stakes are owned by a private
organization or an individual or a group of people
3. Foreign banks – The banks with their headquarters in foreign countries and
branches in our country, fall under this type of bank

➢ REGIONAL RURAL BANKS (RRB)

➢ These are special types of commercial Banks that provide concessional credit to
agriculture and the rural sector.

➢ RRBs were established in 1975 and are registered under a Regional Rural Bank Act,
1976.

➢ RRBs are joint ventures between the Central government (50%), State government
(15%), and a Commercial Bank (35%).

➢ 196 RRBs have been established from 1987 to 2005.

➢ From 2005 onwards government started the merger of RRBs thus reducing the
number of RRBs to 82

➢ One RRB cannot open its branches in more than 3 geographically connected districts.

➢ LOCAL AREA BANKS

➢ Introduced in India in the year 1996

➢ These are organized by the private sector

➢ Earning profit is the main objective of Local Area Banks

➢ SPECIALIZED BANKS

Certain banks are introduced for specific purposes only. Such banks are called specialized banks.

11
These include:
Small Industries Development Bank of India (SIDBI) – A loan for a small-scale industry or
business can be taken from SIDBI. Financing small industries with modern technology and
equipment’s are done with the help of this bank

➢ SMALL FINANCE BANKS

As the name suggests, this type of bank looks after the micro industries, small farmers, and
the unorganized sector of the society by providing them loans and financial assistance. These
banks are governed by the central bank of the country.

➢ PAYMENT BANKS

A newly introduced form of banking, the payments bank has been conceptualized by the
Reserve Bank of India. People with an account in the payments bank can only deposit an
amount of up to Rs 1,00,000 and cannot apply for loans or credit cards under this account.

2.1.9 IMPORTANCE OF BANKING

Banking has greater importance in the economic development and in the development of
different fields. Banks are playing a crucial role in the development of banking, and they
are as follows:

➢ Banks help in formation of capital.

➢ Banks play an important role in mobilizing the savings of people.
➢ It directs the flow of funds into productive channels.
➢ It provides finance to the government.
➢ It provides safety and security to the surplus money of the deposits.

12
2.1.10 INTRODUCTION TO CO-OPERATIVE BANK

A cooperative bank is an institution set up on cooperative base managing regular banking. The
mission of cooperative banks is collecting funds using shares, accepting deposits, and granting
loans just like many other banks that we can see in the banking sector.

The banking-related activities of the cooperative banks are also regulated by the Reserve Bank
of India. It is registered under the Co-operative Societies Act 1969. Co-operative banks used
to gather small scattered and idle savings of the people. They do it to make them available for
productive purposes. The process of capital formation, trade and commerce, industry and
agriculture, small scale, and cottage industries on easy terms at reasonable rates of interest are
very tough for the people, but they make it easy for the people by small scattered and idle
savings of people.
2.1.11 DEFINITION
“A Co-operative bank, as its name indicates is an institution Consisting of a number of
individuals who join to pool their surplus. Savings for the purpose of eliminating the profits
of the bankers or money. Lenders with a view to distributing the same amongst the
depositors and borrowers.”

2.1.12 COOPERATIVE BANKING IN INDIA

The co-operative movement in India was started in India with a view to encourage and promote
thrift and mutual help for the development of persons of small means such as agriculturists,
artisans, and other segments of the society. It was also aimed at concentrating the efforts in
releasing the exploited classes out of the clutches of the money lenders. Keeping
this as one of the objectives, credit societies were formed under Co-operative Societies Act of
1904.
2.1.13 CO-OPERATION IN KERALA

In kerala, the cooperative movement has spread its wings in almost all walks of life. The
spread and growth of cooperatives in different sectors were nurtured under development plans
with government initiative.
The word “Co-Operation” is derived from the Latin word ‘Co-operate’, which means ‘work
together’. In the ordinary sense, co-operation means ‘working together jointly’. The term co-
operation implies a common endeavor with a common end. Those who join should have some

13
economic aim, which they cannot normally achieve by individual isolated action. Union is
‘strength’ and hence they associate together to achieve the common end through self-help and
mutual help. They are guided by the principle “each for all and all for each”

2.1.14 ROLE OF CO-OPERATIVE BANKING IN INDIA

Co-operative Banks are much more important in India than anywhere else in the world. The
distinctive character of this bank is service at a lower cost and service without exploitation. It has
gained its importance by the role assigned to them, the expectations they are supposed to fulfill,
their number, and the number of offices they operate. Co-operative bank’s role in rural financing
continues to be important day by day, and their business in the urban areas also has increased
phenomenally in recent years mainly due to the sharp increase in the number of primary co-
operative banks. In rural areas, as far as the agricultural and related activities are concerned, the
supply of credit was inadequate, and money lenders would exploit the poor people in rural areas
providing them loans at higher rates.

The Co-operative banks in rural areas mainly finance agriculturally based activities like

➢ Farming
➢ Cattle
➢ Milk
➢ Hatchery
➢ Personal finance
➢ The Co-operative banks in urban areas finance in activities like:

➢ Self-employment
➢ Industries
➢ Small scale unit

2.1.15 CHARACTERSTICS OF CO-OPERATIVE BANKING

➢ Co-operative banking is concerned with the performance of the banking
functions ofacceptance of deposits and lending of funds.

➢ Co-operative banks are established under the Co-operative Societies Acts.

➢ A Co-operative bank is an association of persons, and not of capital.

➢ Co-operative banks are democratic institutions, in the sense that they follow the
principleof ‘one man one vote ‘in their management.
14
2.1.16 AIMS OF CO-OPERATIVE BANKING:

➢ To promote thrift among the members and thereby increase the supply of funds.
➢ To tap outside sources of the supply of funds.
➢ To promote the effective use of credit and to reduce the risk in the granting of credit
through careful and continuous supervision of the operation of the borrowing members.

➢ To reduce the cost of management through the honorary services of members

2.1.17 TYPES OF CO-OPERATIVE BANKS

There are two main categories of co-operative banks:

➢ Short term lending Oriented Co-operative Banks

➢ Long term lending Oriented Co-operative Banks

Within short-term lending Oriented Cooperative bank, there are three categories of banks. They
are.
➢ State Co-operative Banks

➢ District Co-operative Banks

Primary Co-operative Societies Within Long term lending Oriented Co-operative bank,
there are land development banks at three levels:

➢ State Level

➢ District Level

➢ Village Level

15
 BANK PROFILE

2. 2 INTRODUCTION

RANNY SERVICE COOPERATIVE BANK LTS NO:65

The Ranny Service Cooperative Bank ltd no: 65 is situated in Ranny, a village in Pathanamthitta
district in Kerala. This bank is one of pathanamthitta's most preferred banker commenced its
operations on 28th January 1919 with the name “Nair velella paraspara sahaya Sangam”. With a
vision to serve the growing rural's rising financial needs, the bank has been introducing innovative
policies, schemes, and loan plans, especially for common man, ever since. The bank plays a
prominent role in the local banking activities. The bank’s annual reports show increase in deposits,
lending, share capital. Considering deposits, higher rates of interest are given. Shareholders are very
much satisfied with overall performance of the bank. The procedure for taking loan is very simple.
So, there is very much possibility for getting loans to every application. All customers are given
adequate consideration. Loans are given comparatively lesser rates.

The bank's beginning was a humble one. But within a span of 100 years, the bank grew from strength
to strength, and is today the number one super grade bank in pathanamthitta district.
In its journey to a sought-after enterprise for top quality and client-satisfaction, the bank has been
promoted to a 'class 1 special bank' since 01/07/1995. After the norms for super grade banks were
implemented, they have been functioning under the status of a super grade bank and according to
that norm since 01/04/2016. The bank operates in two-third part of Ranny village.

2.2.1 VISION

To serve the growing rural's rising financial needs, the bank has been introducing innovative
policies, schemes, and loan plans, especially for common man, ever since.

2.2.3 OBJECTIVES OF THE BANK

The main objects of the Bank are as under:

➢ To afford financial assistance to members in societies.

➢ To carry on banking and credit business.
➢ To inspect, supervise and estimate credit of members.
➢ To help the growth of the cooperative movement

16
 ➢ To provide safe deposit vaults
➢ To distribute seeds Fertilizer, pesticides, manures, etc.
➢ To market Agricultural produce

2.2.4 FACILITIES

➢ COREBANKING

Core banking: In the co-operative banking,the finance flows from a State Co-operative to District
Co-operatives (DCB), which form the prime credit facilitator at a district level and Primary
Agricultural Credit Societies (PACS) form the end-point to which credit needs to be delivered..

It allows the branch to offer retail as well as business oriented products. It is developed on modern
technologies and architecture that is suitable for this segment that operates largely in remote, rural
[Link] addresses the pain points of this segment by removing customer duplication, providing
customer insights, maintaining data integrity, processing real-time updates and providing
comprehensive compliance reporting.

➢ TRANSACTION SMS

SMS banking is a initial step towards mobile banking. It is a facility used by Ranni Service Co-
operative Bank Ltd No.65 to send messages (also called notifications or alerts) to customers' mobile
phones using SMS messaging, or a service provided by them which enables customers to perform
some financial transactions using SMS.

➢ NEFT/RTGS

NEFT (NATIONAL ELECTRONIC FUNDS TRANSFER)

With NEFT, you can transfer any amount to the recipient’s account in a one-on-one transfer basis.
NEFT transactions don’t have a maximum limit for funds that can be transferred in a single day.

➢ TIMINGS FOR NEFT

In our bank we enable this facility with the help of an account opened in Dhanlaxmi Bank,
Thottamon Branch, Ranni. We accept the cheques for the NEFT transactions throughout our
working days but the processing is done only as per the working timings of Dhanlaxmi Bank.

17
 ➢ TRANSACTION LIMITS AND TRANSFER CHARGES

Each account holder can transfer cash through NEFT, but it’s limit is below Rs. 2,00,000(Two
Lakhs) per transaction. The service fee for NEFT transactions is Rs.30 till date.

With NEFT, you can initiate transactions to transfer funds from one bank account to another
throughout India. However, you must make sure that the banks are a part of the NEFT transfer
network (another way to say this is that the banks should be NEFT-enabled).

➢ RTGS (REAL TIME GROSS SETTLEMENT)

The Account holder can use RTGS when they need to transfer large amounts instantly. One
advantage that RTGS has over the other methods is the transaction speed, since the entire amount
is transferred in real time.

➢ TIMINGS FOR RTGS

In our bank we enable this facility with the help of an account opened in Dhanlaxmi Bank,
Thottamon Branch, Ranni. We accept the cheques for the NEFT transactions throughout our
working days but the processing is done only as per the working timings of Dhanlaxmi Bank.

➢ TRANSACTION LIMITS AND TRANSFER CHARGES

There’s a minimum limit of Rs. 2 lakhs and above for RTGS transactions, and there’s no maximum
limit as such. The service fee is a bit higher for RTGS transactions: each transaction is charged from
Rs. 60.

2. 2. 5 AREA OF OPERATION
The area of operation of Ranni Service Co-operative Bank is limited to Ranni Taluk, wards like

▪ Mundapuzha ward
▪ Permbuzha –Thottamon ward
▪ Thottamon ward
▪ Thekkepuram ward
▪ Thekkepuram-vykom ward
▪ Vykom ward

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▪ Puthusserimala ward
▪ Palachuvadu-Narikuzhi North

2.2.6 EMPLOYEES OF RANNI SERVICE CO -OPERATIVE BANK

SL No. Name of employee Designation

1 C.N Rajan Secretary
2 N.G Thomaskutty [Link]
3 [Link] Accountant
4 Jolly Kuriakose Accountant
5 Smitha K Das Accountant
6 Shanti M System Administrator
7 Aswathy Raveendran Senior Clerk
8 Sreelakshmei M S Senior Clerk
9 Faisal M Mohammed Senior Clerk
10 Ashley C Thankachan Junior Clerk
11 P V Biju Kumar Salesman
12 Gopi Krishna Attender
13 Shilpa S Attender
14 Vipin P Ponnappan Peon
15 Arun Kuriakose Peon
16 Adarsh Janaradhan Collection Agent

2.2.7 MEMBERSHIP

There are 3 types of membership offered by the bank. They are: -

1) A CLASS MEMBERSHIP

Any individual who has above 18 years of age and stays within the area of operation of the bank or
having occupation or land within this area can get the [Link] can participate in general
meetings of the bank. They can stand for the election of board of members. They have voting rights.
They can take part in bank’s business activities.

19
2) B CLASS MEMBERSHIP

This kind of membership is offered for those who do not belong to the area of operation. They are
not allowed to participate in general meetings. They do not have voting rights. They can hold only
1 share of the bank.

3) C CLASS MEMBERSHIP

C class members are Government and other bodies like Kudumbasree or Ayalkootam.

2. 2.8 DIRECTOR BOARD

The Director Board is responsible for the smooth functioning of the banking activities. They have
the right to control all the activities. Currently, the Director Board consists of 9 members. Among
this, 1 will be a lady representative, 1 will be SC/ST and the rest 7 will be elected from the wards
within the area of operation of the bank. The tenure of the Director Board is 5 years from the date
of election. President will be the head of the bank.

2.2.8 BOARD OF DIRECTORS

[Link] NAMES OF THE BOARD MEMBERS

1 [Link] KURIAKOSE (PRESIDENT)

2 K.C. OONITTAN

3 A.V. JOHN

4 [Link]

5 JOJO KOVOOR

6 RAMACHANDRAN NAIR M. K

7 GOIPINATHA PILLAI K.C

8 M.K. RETHNAMMA

9 SHEEJA JOY

10 V.K VASUDEVAN

11 SASIKALA RAJASEKHARAN

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 2.2.9 RANNY SERVICE COOPERATIVE BANK ltd no: 65

WORK PROGRESS ([Link] lakhs)

Years Members Share Deposits Loans Working Profit Profit% Audit Bank’s
Capital Capital Class Grade
1971 504 0.31 0.02 0.51 0.85 -0.03 Nil C Nil

1973 550 0.48 0.05 1.02 1.54 0.06 Nil C Nil

1976 755 0.5 2.89 2.41 3.32 0.04 Nil B Nil

1980 1919 2.11 18.38 22.37 22.06 0.48 Nil B III

1981 2140 2.65 27.01 30.97 29.88 0.24 5% B III

1983 2368 3.09 49.07 54.60 53.10 0.87 10% B II

1986 2704 4.19 108.91 111.19 114.17 2.99 10% B I

1989 3413 6.64 209.41 235.95 235.20 2.45 10% A I

1996 6377 15.34 800.55 721.12 856.60 6.13 15% A I (Spl

Grade)
2001 8191 17.70 1399 845 1431 6.30 20% A I (Spl
Grade)
2005 8732 19.56 1875 875 2012 10.70 20% A I (Spl
Grade)
2008 9775 30.50 2605 1526 2771 16.14 20% A I (Spl
Grade)
2010 10618 38.71 3813 2182 4140 15052 20% A I (Spl
Grade)
2011 10956 46.61 4147 2747 4392 21085 20% A I (Spl
Grade)
2012 11268 63.47 5910.12 3608.40 6047.29 24.32 20% A I (Spl
Grade)

2.2.10 DEPOSITS

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A deposit account is a savings account, current account, or other type of bank account, at
a banking institution that allows money to be deposited and withdrawn by the account holder.
These transactions are recorded on the bank's books, and the resulting balance is recorded as
a liability for the bank and represents the amount owed by the bank to the customer.

1) Savings Bank Deposit

Savings account funds are considered one of the most liquid investments outside of demand
accounts and cash. In this type of deposit, the customer can deposit money and withdraw it at
any time. If a new customer is coming, he should be introduced by an account holder.
Nomination of a person is compulsory. If the account holder deceases and the nominee do not
claim the money, other legal heirs can also claim the money. Interest will be given for the least
amount in the account for one month, i.e., 10th of a month to the last date of that month.

2) Current Account

A deposit account held at a bank or other financial institution, for the purpose of securely and
quickly providing frequent access to funds on demand, through a variety of different channels.
Because money is available on demand these accounts are also referred to as demand accounts
or demand deposit accounts

3) Recurring Deposit

Fixed amount should be deposited in installment for a particular period. This amount can be
withdrawn at any point of time. If the amount is withdrawn after 1 year of deposit, the normal
interest will be charged and if it is below 1 year, SB account interest is given. The interest of
this type of deposit will be compounded monthly.

4) Fixed Deposit

Fixed amount should be deposited for fixed period. There is no minimum or maximum limit
for the amount. Interest rate will be high. Generally, interest rate for fixed deposit and
recurring deposit is same. Once the maturity period is completed the amount can withdraw.
Depositor can re-deposit the money. If the amount is withdrawn before the due date, the
interest will be calculated as the interest for the completed period minus 1%. There is an option
of taking loan from the deposit, but the amount can be maximum 90% of the deposit amount.

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 Fixed Deposit Interest Rate

15 days – 45 days 4.75%

46 days – 90 days 5.25%
91 days – 179 days 5.75%
6 months - 1 year 6.25%
1 year – 2 years 6.75%
2 Year 6.50%

Senior citizens will get extra 0.5%.

5) Sreevardhini Deposits

This is special type of fixed deposit offered by the bank. The amount will be deposited for a
year. In between withdrawal of interest is not possible. The interest will be compounded
quarterly.

2.2.11 LOANS

A loan is a debt evidenced by a note which specifies that, among other things, the principal
amount, interest rate, and date of repayment. A loan entails the reallocation of the subject asset
for a period of time, between the lender and the borrower. The loan is generally provided at a
cost, referred to as interest on the debt, which provides an incentive for the lender to engage in
the loan.

There are different types of loans offered by our banks

➢ Short- Term Loan

1. Agricultural Loan

It is a type of short-term loan offered by the bank. This loan is given only to the members who
are having farming occupation. The loan is given for agricultural purpose. The interest charged
is 7%. The maximum amount limit is Rs.3, 00,000. The loan should be repaid within 1 year.

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2. Ordinary Loan

Ordinary loans are those loans which can be taken for any purpose. The time to pay back this
type of loan is 1 year. The interest charged on it is 15%. Cash credit nonagricultural loan. These
types of loans can be taken for only business purposes. It can be renewed after every 1 year.
The maximum amount limit is Rs.10, 00,000. There is no fixed interest rate for this type of
loan. The interest rate will increase after every 6 months, i.e., September 30 and March 31.

3. Gold loan
Under gold loan the loans are provided on keeping a security as gold for personal,agriculture
purpose. The interest rates for gold loans are 12%. Mainly gold loan having a period of 3
months.

➢ Medium Term Loan

1. Medium term agricultural loan

This is a type of medium-term loan offered by the bank for agricultural purposes. The period
of repayment of the loan is 3 years. It can be repaid in 36 or 18 installments. The rate is 9%.

2. Medium term nonagricultural loan

This loan can be taken for the purchase of land or home appliances. The period of repayment
is 36 or 60 months. The interest rate charged for the loan is 15%. This can be paid in monthly
installment basis. The bank has the right to file case against the loan defaulter if he fails to pay
3 or more installments.

➢ Long term loan

1. Housing loan

This type of loan is offered for the constructing houses. For construction of new house, the
period of repayment is 10 years. The payment should be on a monthly instalment basis. The
maximum amount limit for the loan is Rs.10, 00,000. An interest rate of 13.25% to 14.5% can
be charged depending on the amount borrowed. For this the same land should be pledged. For
maintaining an existing house, the repayment period is 5 years. The maximum amount limit
allowed for renovating is Rs.5, 00,000.

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2. Kudumbasree loan

This loan is offered for kudumbasree units. The maximum amount limit is Rs.2, 00,000. The
period of repayment is 3 years. The interest rate charged is 9%.

2.2.12 SERVICES
Apart from the main function of accepting deposits and granting advances, a banker also
performs several other services to customers. Such services are called the subsidiary. And
ancillary and ancillary services. By performing the subsidiary services, a banker will be able to
earn the goodwill of his customers and fresh customers.

The subsidiary services of a banker may be classified into two classes. They are
• Agency Services
• Miscellaneous Services

AGENCY SERVICES

The service rendered by a banker as an agent of his customers is called agency services.
The important agency services rendered by a banker are as follows:
➢ Collection of money on behalf of customers understanding instructions
➢ Collection and payment of pension
➢ Purchasing and sale of securities on behalf of customers
➢ Arranging for remittance of funds on behalf of customers

MISCELLANEOUS SERVICES
Service rendered by a banker not only to his customers but also to the public is called general
utility services. They are.

➢ Safe custody of valuables

➢ Dealing in the foreign exchange business

➢ Issuing of traveler’s letters of credit, circular notes, and traveler’s cheques

➢ Collecting information about other businessmen for customer

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2.2.13 FUTURE GROWTH AND PROSPECTUS
The Ranni Service Co-operative Bank is making their plans for the emerging mobile
banking,innovation of bank office,increasing the marketing of agricultural equipments in
reasonable price,launching medical diagnostic center,opening senior citizen counter, and
expansion of agricultural loans.

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 CHAPTER III

INTERNSHIP METHODOLOGY

27
3.1 RESEARCH PROBLEM
Financial Performance of Ranni Service Co-operative Bank of Pathanamthitta district Kerala

3.2 OBJECTIVES OF THE STUDY

1. To identify the financial performance of the bank
2. Study the financial position of the bank
3. Study the liquidity position of t h e b a n k
4. Study the profitability and solvency of the bank
5. To offer suggestions based on the study
6. Study the operating efficiency of the bank.

3.3 SCOPE OF THE STUDY

The scope of the study deals with the study and analysis of the financial performance of the bank.
This study helps to know about how the Ranni service cooperative bank deal with its financial
performance. The result of the study will be useful for the bank.

3.4 RESEARCH METHODOLOGY

The study is based mainly on secondary data and partly deals with the primary data. The audit
statement and annual statement of the bank include the P&L account and balance sheet. The primary
data is collected through direct interviews with the bank manager concerning the subject matter of
the theme. The main data that is collected for the present study is the secondary data.

➢ PRIMARY DATA
The first-hand data collected directly from the resource person can be called primary data and here
for the study, the face-to-face interview with the manager helps to get the information. These data are
data originated from the researcher’s work of analysis. Therefore, these data are ready data for further
study and analysis. Since these types of data are directly collected from the people for the first time
it is called primary data. These kinds of data are the data that can be believable. But one of the main
problems of primary data is difficult to collect.

➢ SECONDARY DATA
The data that is not directly collected by the analyst can be categorized as secondary data and those
data are mainly collected from the published and unpublished sources. Some of the secondary
sources are as shown below
❖ Annual statement
❖ Audit statement

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 ❖ Previous reports
❖ Information from the internet
❖ Books and publication
❖ Bank website

3.5 TOOLS USED FOR FINANCIAL ANALYSIS

Different methods are used to find out the financial position of the company which are given below

❖ Ratio analysis
❖ Trend analysis
❖ Common size balance sheet
❖ Comparative balance sheet

3.5.1 RATIO ANALYSIS

A ratio analysis is a quantitative analysis of information contained in a company’s financial

statements. Ratio analysis is used to evaluate various aspects of a company’s operating and financial
performance such as its efficiency, liquidity, profitability, and solvency. In this study ratios are
classified into :
➢ Liquidity ratio
➢ Profitability ratio
➢ Efficiency ratio or Activity ratio
➢ Solvency ratio

➢ LIQUIDITY RATIOS:
Liquidity ratios analyses the ability of a company to pay off both its current liabilities as they
become due as well as their long-term liabilities as they become current. In other words, these ratios
show the cash levels of a company and the ability to turn other assets into cash to pay off liabilities
and other current obligations. Liquidity is not only a measure of how much cash a business has. It
is also a measure of how easy it will be for the company to raise enough cash or convert assets into
cash. Assets like accounts receivable, trading securities, and inventory are relatively easy for many
companies to convert into cash in the short term.

➢ CURRENT RATIO
The current ratio is a liquidity and efficiency ratio that measures a firm’s ability to pay off its short-

29
term liabilities with its current assets. The current ratio is an important measure of liquidity because
short-term liabilities are due within the next year. This means that a company has a limited amount
of time to raise the funds to pay for these liabilities. Current assets like cash, cash equivalents, and
marketable securities can easily be converted into cash in the short term.
Format: Current ratio = Current assets / Current liabilities

➢ QUICK RATIO (ACID TEST RATIO)

The quick ratio or acid test ratio is a liquidity ratio that measures the ability of a company to pay its
current liabilities when they come due with only quick assets. Quick assets are current assets that
can be converted to cash within 90 days or in the short-term. Cash, cash equivalents, short term
investments or marketable securities, and current accounts receivable are considered quick assets.
The quick ratio is often called the acid test ratio in reference to the historical use of acid to test metals
for gold by the early miners.
Format: Quick ratio = Quick assets / Current liabilities

➢ CASH COVERAGE RATIO

The cash ratio or cash coverage ratio is a liquidity ratio that measures a firm’s ability to pay off its
current liabilities with only cash and cash equivalents. The cash ratio is much more restrictive than
the current ratio or quick ratio because no other current assets can be used to pay off current debt–
only cash. Therefore, many creditors look at the cash ratio. They want to see if a company maintains
adequate cash balances to pay off all their current debts as they come due.
Format: Cash coverage ratio = Cash + Cash equivalents/ Current liabilities

➢ NET WORKING CAPITAL

Net working capital is a liquidity calculation that measures a company’s ability to pay off its current
liabilities with current assets. This measurement is important to management, vendors, and general
creditors because it shows the firm’s short-term liquidity as well as management’s ability to use its
assets efficiently Much like the working capital ratio, the networking capital formula focuses on
current liabilities like trade debts, accounts payable, and vendor notes that must be repaid in the
current year

30
 Format: Working capital = Current assets – Current liabilities

➢ PROFITABILITY RATIOS:

Profitability ratios compare income statement accounts and categories to show a company’s ability
to generate profits from its operations. Profitability ratios focus on a company’s return on
investment in inventory and other assets. These ratios basically show how well companies can
achieve profits from their operations. Investors and creditors can use profitability ratios to judge a
company’s return on investment based on its relative level of resources and assets. In other words,
profitability ratios can be used to judge whether companies are making enough operational profit
from their assets.

➢ GROSS PROFIT RATIO

Gross profit ratio is a profitability ratio that compares the gross margin of a business to the net sales.
This ratio measures how profitable a company sells its inventory or merchandise. In other words, the
gross profit ratio is essentially the percentage mark up on merchandise from its cost. This is the pure
profit from the sale of inventory that can go to paying operating expenses. Gross margin ratio is
often confused with the profit margin ratio, but the two ratios are completely different
Format: Gross profit ratio = (Gross profit/ Net sales) *100

➢ NET PROFIT RATIO

The net profit margin ratio, also called net margin, is a profitability metric that measures what
percentage of each dollar earned by a business ends up as profit at the end of the year. In other words,
it shows how much net income a business makes from each dollar of sales.
Formula: Net profit ratio = (Net profit/ Net sales) *100

➢ RETURN ON SHAREHOLDERS’ FUNDS

Return on Shareholders’ Funds is one of the ratios of overall profitability group, which indicates
the profitability of a firm in relation to the funds supplied by the shareholders or owners. This ratio
is especially important from the owner’s point of view as it helps the firm to know whether the firm
has earned enough returns to repay its shareholders or not.

Formula: Net Profit/Shareholders fund * one hundred

➢ RETURN ON EQUITY SHARE CAPITAL

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The ROE ratio is calculated by dividing the net income of the company by total shareholder
equity and is expressed as a percentage. The ratio can be calculated accurately if both the net
income and equity are positive in value. Return on equity ratio formula is expressed as –
Return on equity = Net income / Average shareholder’s equity. Here, net income is computed
before dividends are allocated to the common shareholders. Further, it is calculated after
dividends are paid out to preferred shareholders, and interest is paid to lenders.
Formula: Net Profit /Equity share capital *one hundred

➢ SOLVENCY RATIO

A solvency ratio is a key metric used to measure an enterprise’s ability to meet its long-term debt
obligations and is used often by prospective business lenders. A solvency ratio indicates whether a
company’s cash flow is sufficient to meet its long-term liabilities and thus is a measure of its
financial health. An unfavourable ratio can indicate some likelihood that a company will default on
its debt obligations. Solvency ratios measure a company’s cash flow, which includes non-cash
expenses and depreciation, against all debt obligations

➢ DEBT EQUITY RATIO

The debt-to-equity (D/E) ratio is used to evaluate a company's financial leverage and is calculated
by dividing a company’s total liabilities by its equity. The D/E ratio is an important metric used in
corporate finance. It is a measure of the degree to which a company is financing its operations
through debt versus owned funds. More specifically, it reflects the ability of shareholder equity to
cover all outstanding debts in the event of a business downturn. The debt-to-equity ratio is a
particular type of gearing ratio.

Formula: Debt/ Equity or Long-term Debts/Shareholders ‘fund or Net Worth

➢ PROPRIETARY RATIO

The proprietary ratio (also known as the equity ratio) is the proportion of shareholders' equity
to total assets, and as such provides a rough estimate of the amount of capitalization currently
used to support a business. If the ratio is high, this indicates that a company has a sufficient
amount of equity to support the functions of the business, and probably has room in its financial
structure to take on additional debt, if necessary. Conversely, a low ratio indicates that a

32
business may be making use of too much debt or trade payables, rather than equity, to support
operations (which may place the company at risk of bankruptcy).

Formula: Shareholder’s fund /Total Assets

➢ SOLVENCY RATIO

Solvency ratios measure a company’s cash flow, which includes non-cash expenses and
depreciation, against all debt obligations. For instance, consider the debt-to-assets ratio, a popular
metric that measures the degree that a company’s assets are financed by debt, where debt-to-assets
equals total assets divided by total debt. Another common solvency ratio, the debt-to-equity (D/E)
ratio, shows how financially leveraged a company is, where debt-to-equity equals total debt divided
by total equity.

Formula: Total liabilities to outsiders/Total Assets

➢ FIXED ASSET RATIO

The fixed asset turnover ratio is an efficiency ratio calculated by dividing a company's net sales by
its net property, plant, and equipment (property, plant, and equipment - depreciation). It measures
how well a company generates sales from its property, plant, and equipment.

A high fixed asset turnover ratio often indicates that a firm effectively and efficiently uses its assets
to generate revenues. A low fixed asset turnover ratio indicates the opposite: a firm does not use its
assets effectively or to its full potential to generate revenue.

Formula: Fixed Asset /Total Long-term funds

➢ FIXED ASSET TO NET WORTH

Fixed-assets-to-net-worth ratio can be calculated by dividing the value of all fixed assets by net
worth. Fixed assets refer to the long-term, tangible business assets that are classified as property,
plant, and equipment. Subtracting total liabilities from total assets yields the net worth. Multiplying
the resulting ratio by one hundred expresses it in percentage terms.

Calculate net fixed assets, you will take the value of total fixed assets and deduct the accumulated
depreciation from it. The net worth of the firm is what will be left if the firm decides to shut shop
and pay off all its liabilities.
33
Formula: Fixed Assets/Net worth or shareholder’s fund

➢ EFFICIENCY RATIOS OR ACTIVITY RATIO

Efficiency ratios also called activity ratios measure how well companies utilize their assets to
generate income. Efficiency ratios often look at the time it takes companies to collect cash from a
customer or the time it takes companies to convert inventory into cash—in other words, make sales.
These ratios are used by management to help improve the company as well as outside investors
and creditors looking at the operations of profitability of the company

➢ INVENTORY TURNOVER RATIO

The day’s sales in inventory calculation, also called days’ inventory outstanding or simply days in
inventory measures the number of days it will take a company to sell all of its inventory. In other
words, the day’s sales in inventory ratio show how many days a company’s current stock of
inventory will last. This is important to creditors and investors for three main reasons. It measures
value, liquidity, and cash flows.
Formula: Inventory turnover ratio = Cost of goods sold/ Average inventory

➢ WORKING CAPITAL TURNOVER RATIO

A high turnover ratio shows that management is being very efficient in using a company’s short-
term assets and liabilities for supporting sales. In other words, it is generating a higher dollar amount
of sales for every dollar of working capital used. In contrast, a low ratio may indicate that a business
is investing in too many accounts receivable and inventory to support its sales, which could lead to
an excessive amount of bad debts or obsolete inventory.

Gauge just how efficient a company is at using its working capital, analysts also compare working
capital ratios to those of other companies in the same industry and look at how the ratio has been
changing over time. However, such comparisons are meaningless when working capital turns
negative because the working capital turnover ratio then also turns negative.

Formula: Net Revenue from operations/Net Working Capital

➢ FIXED ASSET TURNOVER RATIO

The fixed asset turnover ratio (FAT) is, in general, used by analysts to measure operating
performance. This efficiency ratio compares net sales (income statement) to fixed assets (balance
34
sheet) and measures a company's ability to generate net sales from its fixed-asset investments,
namely property, plant, and equipment (PP&E).The fixed asset balance is used as a net of
accumulated depreciated. A higher fixed asset turnover ratio indicates that a company has
effectively used investments in fixed assets to generate sales.

Formula: Net Revenue from operations/ Fixed Assets

➢ RETURN ON CAPITAL EMPLOYED OR RETURN ON INVESTMENT

Return on capital employed or ROCE is a profitability ratio that measures how efficiently a
company can generate profits from its capital employed by comparing net operating profit to capital
employed. In other words, the return on capital employed shows investors how many dollars in
profits each dollar of capital employed generates.
Formula: Return on capital employed = Net operating profit / Capital employed

➢ COMPARATIVE BALANCE SHEET:

A comparative balance sheet presents side-by-side information about an entity's assets, liabilities,
and shareholders' equity as of multiple points in time. the intent is to provide the reader with a
series of snapshots of a company's financial condition over time.

➢ COMMON SIZE ANALYSIS:

Common-size analysis also called vertical analysis converts each line of financial statement data
to an easily comparable, or common-size, amount measured as a percent. This is done by stating
income statement items as a percent of net sales and balance sheet items as a percent of total assets
or total liabilities and shareholders’ equity.

➢ TREND ANALYSIS:

Horizontal analysis (also known as trend analysis) is a financial statement analysis technique that
shows changes in the amounts of corresponding financial statement items over a period. It is a
useful tool to evaluate the trend situations. The statements for two or more periods are used in the
horizontal analysis. The earliest period is usually used as the base period and the items on the
statements for all later periods are compared with items on the statements of the base period. The
changes are generally shown both in dollars and percentage.

35
 3.6 DATA ANALYSIS TOOLS
A tool used for the data analysis of Ranni service co-operative bank is a spreadsheet because
analysis includes basic formulas, tables, and graphical representation of data.
3.7 LIMITATIONS OF THE STUDY
❖ Findings and suggestions only to service Ranni co-operative bank

❖ The study was restricted to till 2020 annual data

❖ The study was conducted with the help of annual data available from the bank

❖ The duration of the study was restricted to just 5 weeks

❖ Restrictions in the bank due to COVID 19

❖ Lack of proper and continuous interaction with the staff as they have a busy
schedule

❖ Only past data of accounting information is included in the financial statements,

which are analyzed. The future cannot be just like the past. Hence, the analysis of
financial statements cannot provide a basis for future estimation, forecasting,
budgeting, and planning

❖ This study is based on past data (annual reports, accounts, journals, etc.) It may
cause difficulty to estimate or forecast the future.

❖ Secondary data is used for this project they can be inadequate, inappropriate, or
irrelevant.

❖ The duration of the study was one of the constraints of the study.

3.8 ANNUAL DATA CONSIDERED FOR THE STUDY

❖ 5 years annual data (2016,2017,2018, ,2019,2020)

36
 CHAPTER- 4
DATA ANALYSIS AND
DISCUSSION

37
4.1 INTODUCTION

Data analysis tools used for this study are ratio analysis, trend analysis, comparative balance
sheet and common size analysis. The intension of using these tools understands the overall
financial performance of a firm. It includes profitability, liquidity, and efficiency of the firm.

4.2 RATIO ANALYSIS

4.2.1 CURRENT RATIO
TABLE 4.1 CURRENT RATIO

Particulars 2016 2017 2018 2019 2020

Current Assets 597542402.19 731022707.5 860077015.2 862058973.9 885821575.1
Current 74108587.85 77290196.85 85592067.85 94586230.65 92345451.15
Liabilities
Current Ratio 8.06 9.45 10.04 9.11 9.59

FIGURE 4.1 CURRENT RATIO

CURRENT RATIO

9.59 8.06 2016

2017

9.45
2018
9.11
2019
2020
10.04

INTERPRETATION:
The current ratio measures its short-term solvency. Current ratio expresses a firm’s
current debt in terms of current assets. The standard current ratio is 2:1. The bank
shows that current ratio is between 8.06 to 10.04 in five consecutive years. Higher
current ratio is always more favorable than a lower current ratio because it shows the
bank can be easier to make current debt payment. Current ratio is higher in 2018 is
10.04 and lower in 2016 is 8.06.

38
4.2.2 QUICK RATIO
TABLE 4.2 QUICK RATIO

Particulars 2016 2017 2018 2019 2020

Quick Assets 597468129.19 730961651.27 798172908.43 859508590.93 865533378.88
Current
74108587.85 77290196.85 85592067.85 94586230.65 92345451.15
Liabilities
Quick Ratio 8.06 9.45 9.32 9.08 9.37

FIGURE 4.2 QUICK RATIO

QUICK RATIO
10
9.45 9.32 9.37
9.5
9.08
9

8.5
8.06
8

7.5

7
2016 2017 2018 2019 2020

INTERPRETATION:
Higher quick ratios are more favorable for bank because it shows there are more quick
assets than current liabilities. If the ratio is more than 1:1, then financial position of the
bank is sound and good. The bank shows that quick ratio is between 8.06 to 9.45 in five
consecutive years.
Quick ratio is higher in 2017 is 9.45 and least is 2016 is 8.06. Quick ratio is the true
test of measuring [Link] this banks quick ratio indicates sound financial position.

39
4.2.3 NET WORKING CAPITAL

TABLE 4.3 NET WORKING CAPITAL

Particulars 2016 2017 2018 2019 2020
Current Assets 597542402.19 731022707.5 860077015.2 862058973.9 885821575.1
Current 74108587.85 77290196.85 85592067.85 94586230.65 92345451.15
Liabilities
Net Working 523433814.34 653732510.63 774484947.3 767472743.28 793476123.91
Capital 9

FIGURE 4.3 NET WORKING CAPIT

NET WORKING CAPITAL

523433814.3
793476123.9

653732510.6

767472743.3

774484947.4

2016 2017 2018 2019 2020

INTERPRETATION:
A positive net working capital is better than a negative one (below zero). A positive
calculation shows creditors and investors that the company can generate enough from
operations to pay for its current obligations with current assets. In this case of net
working capital is higher in 2020 are 793476123.91 and least in 2016 are
523433814.34. In 2019 there is a moderate decrease in working capital.

40
4.2.4 CASH COVERAGE RATIO

TABLE 4.4 CASH COVERAGE RATIO

Particulars 2016 2017 2018 2019 2020

Cash And Cash 489304398.8 624446164.88 69730339.04 741813899.54 759450014.49
Equivalents 0
Current Liabilities 74108587.85 77290196.85 85592067.00 94586430.65 92345451.15
Cash Coverage 6.60 8.07 8.14 7.84 8.22
Ratio

FIGURE 4.4 CASH COVERAGE RATIO

CASH COVERAGE RATIO

10

8 8.07 8.14 7.84 8.22

6 6.6

0
2016 2017 2018 2019 2020

INTERPRETATION

A cash coverage ratio of 1 means that the company has the same amount of cash and
equivalents as it has current debt. In other words, to pay off its current debt, the
company would have to use all its cash and cash equivalents. In this case cash coverage
ratio is very high. It always shows above 1 and below 0.5. Lower ratio in 2016 and
higher in [Link] coverage ratio between 6.60 [Link] this indicates the bank has
sound financial position.

41
4.2.5 DEBT- EQUITY RATIO

TABLE 4.5 DEBT- EQUITY RATIO

Particulars 2016 2017 2018 2019 2020

Long term
941194338.89 1040160138.5 1090745206.4 1169598148.6 1200177849.2
debt
Shareholde
35135197.97 37738632.88 40505081.46 45300189.09 49013270.09
r’s fund
Debt Equity
26.78 27.56 26.92 25.81 24.48
Ratio

FIGURE 4.5 DEBT- EQUITY RATIO

DEBT- EQUITY RATIO

24.48 26.78
2016
2017
2018

27.56 2019
25.81
2020

26.92

INTERPRETATION:
An accepted norm for this ratio is 2:1. A high ratio shows that claims the long-term lenders are
more than that of owners. A very high ratio is unfavorable for the firm. A low debt – equity
ratio Implies a higher claim of owners than that of the long-term lenders and is favorable to the
firm. This table indicates higher debt equity ratio is in 2017 that is 27.56 and least ratio in 2020
is 24.48. This shows compared to 2016 there is a of decrease in the debt equity ratio, so this
bank shows less debt-equity ratio is favourable to the bank.

42
 4.2.6 PROPRIETARY RATIO

TABLE 4.6 PROPRIETARY RATIO

Particulars 2016 2017 2018 2019 2020

Shareholder’
35135197.97 37738632.88 40505081.46 45300189.09 49013270.09
s fund
Total Asset 1205819126.40 1343507256.08 1427821315.14 1550350169.34 1609772426.24
Proprietary
0.29 0.02 0.028 0.029 0.030
Ratio

FIGURE 4.6 PROPRIETARY RATIO

PROPRIETARY RATIO
0.35
0.3 0.29
0.25
0.2
0.15
0.1
0.05
0.02 0.028 0.029 0.03
0
-0.052015 2016 2017 2018 2019 2020 2021

INTERPRETATION:
Proprietary ratio shows the financial strength of the concern. It helps the lenders to
find out the proportion of shareholders fund to the total asset higher ratio indicates a
secured position to lenders and low ratio indicates more risk to lenders it indicates the
long-term solvency of the bank. In this table shows that 2016 the ratio is 0.29 and 2020
is 0.030 so, it shows that higher ratio indicates secured position to lenders.

43
4.2.7 SOLVENCY RATIO

TABLE 4.7 SOLVENCY RATIO

Particulars 2016 2017 2018 2019 2020

Total Liabilities
1018385996.9 1120804975.5 1176790356.4 1268286919.4 1296914340.6
to outside
Total Asset 1205819126.40 1343507256.08 1427821315.14 1550350169.34 1609772426.24
Solvency Ratio 0.84 0.83 0.82 0.81 0.80

FIGURE 4.7 SOLVENCY RATIO

SOLVENCY RATIO

0.85 0.84
0.84 0.83
0.83 0.82
0.82 0.81
0.81 0.8
0.8
0.79
0.78

2016 2017 2018 2019 2020

INTERPRETATION:
The lower the solvency ratio of total liabilities to total assets more satisfactory or stable
is the long-term solvency position of the bank. The bank shows that solvency ratio is
between 0.80 to 0.84 in five consecutive years in this case the lower ratio is in 2020 as
compared to 2016 there is a decrease in the ratio .0.80 in 2020 this lower solvency
ratio is more satisfactory or stable long term solvency position of the bank.

44
 4.2.8 FIXED ASSET RATIO

TABLE 4.8 FIXED ASSET RATIO

Particulars 2016 2017 2018 2019 2020

Fixed Assets 578885583.84 5790769191.44 591308752.54 648052948.04 676724080.04

Total Long-term
1295628507 1081253411.5 1131703370 1219000877.8 1253582159.5
fund
Fixed Asset Ratio 0.44 0.53 0.522 0.53 0.53

FIGURE 4.8 FIXED ASSET RATIO

FIXED ASSET RATIO

0.6
0.5 0.53 0.522 0.53 0.53
0.4
0.44
0.3
0.2
0.1
0
2016 2017 2018 2019 2020

INTERPRETATION:
The ratio indicates the extent to which the financial total of fixed assets is financed by
total long-term funds of the firm. It is better if the total of fixed assets is equal to total
long-term fund that is 1:1. The bank shows that fixed asset ratio is between 0.44 to
0.53 in five consecutive years. In 2020 it is 0.53 almost near to 1. Compared to
previous year the ratio increased by year to year. So, it indicates good financial policy.

45
4.2.9 FIXED ASSET TO NETWORTH

TABLE 4.9 FIXED ASSET TO NETWORTH

Particulars 2016 2017 2018 2019 2020

Fixed
578885583.84 5790769191.44 591308752.54 648052948.04 676724080.04
Assets
Net worth 35135197.97 37738632.88 40505081.46 45300189.09 49013270.09
Fixed Asset
16.47 15.34 14.59 14.30 13.80
to Net worth

FIGURE 4.9 FIXED ASSET TO NETWORTH

FIXED ASSET TO NETWORTH

13.8
16.47

14.3
15.34

14.59

2016 2017 2018 2019 2020

INTERPRETATION:
This ratio shows that relationship between fixed assets and shareholder’s fund. if the
ratio is greater than one it means that outsiders fund has also been used to acquire a
part of the fixed asset. The bank shows that fixed asset to net worth ratio is between
13.80 to 16.47 in five consecutive years.

46
4.2.10 GROSS PROFIT RATIO

TABLE 4.10 GROSS PROFIT RATIO

Particulars 2016 2017 2018 2019 2020

Gross Profit 5525.77 10388.68 646868.8 1385994.2 1460326.88
Net Sales 489602.34 768583.45 9954912 16110263 17277139.5
Gross Profit
1.12% 1.35% 6.49% 8.60% 8.45%
Ratio

FIGURE 4.10 GROSS PROFIT RATIO

GROSS PROFIT RATIO

10.00% 8.60% 8.45%

8.00% 6.49%
6.00%
4.00%
2.00% 1.12% 1.35%
0.00%
2016 2017 2018 2019 2020

INTERPRETATION:
Gross profit serves as a valuable indicator of the concern ability to effectively utilize the
outside sources of fund. Least gross profit ratio is in 2016 is 1.12% and higher in 2019
is 8.60%. The higher the gross profit margin the better. A high gross profit margin means
that the bank did well in managing its cost of sales. It also shows that the company has
more to cover for operating, financing, and other costs. So, this ratio indicates the bank
has done well in managing its cost of sales.

47
4.2.11 NET PROFIT RATIO

TABLE 4.11 NET PROFIT RATIO

Particulars 2016 2017 2018 2019 2020

Net Profit 5102295.91 589763.08 8482207.63 7140825 5834353.99

Net Sales 489602.34 768583.45 9954915 16110263 17277139.5
Net Profit Ratio 10.46% 76.73% 85.20% 44.32% 33.76

FIGURE 4.11 NET PROFIT RATIO

NET PROFIT RATIO

100.00%
85.20%
80.00% 76.73%
60.00%

40.00% 44.32%
33.76%
20.00%
10.46%
0.00%
2016 2017 2018 2019 2020

INTERPRETATION:
Profit ratio is an index of efficiency and profitability of the bank. This ratio used to
measure the overall profitability and hence it is especially useful to proprietors. Higher
ratio better is the operational efficiency of the bank. Net profit ratio is between 10.46%
to 85.20% during five consecutive years. Higher net profit ratio in 2018 this shows
better is the operational efficiency of the bank.

48
4.2.12 RETURN ON SHAREHOLDERS’ FUND

TABLE 4.12 RETURN ON SHAREHOLDERS’ FUND

Particulars 2016 2017 2018 2019 2020

Net Profit 5102295.91 5897636.08 8482207.63 7140825 5834353.99
Shareholder’s
35135197.97 37738632.88 40505081.46 45300189.09 49013270.09
fund
Return On
Shareholders 14.52% 15.62% 20.94% 15.76% 11.90%
Fund

FIGURE 4.12 RETURN ON SHAREHOLDERS’ FUND

RETURN ON SHAREHOLDERS’ FUND

11.90% 14.52%

15.76%
15.62%
20.94%

2016 2017 2018 2019 2020

INTERPRETATION:
This ratio shows the rate of profit on shareholders’ fund. It relates the profit available
for the shareholders on their total investments. It is also as profit on net worth ratio.
Higher ratio is in 2018 is 20.94%. least ratio is in 2020 is 11.90 %. The bank shows
that return on shareholders fund is between 11.90%to 20.94% in five consecutive
years.

49
4.2.13 RETURN ON EQUITY SHARE CAPITAL

TABLE 4.13 RETURN ON EQUITY SHARE CAPITAL

201 201 201

Particulars 2019 2020
6 7 8
Net Profit 5102295.91 5897636.08 8482207.63 7140825 5834353.99
Equity Share
15600300 15691740 15660385 15443945 15449010
Capital
Return On
Equity Share 32.70% 37.58% 54.16% 46.23% 37.76%
Capital

FIGURE 4.13 RETURN ON EQUITY SHARE CAPITAL

RETURN ON EQUITY SHARE CAPITAL

60.00% 54.16%
50.00% 46.23%
37.58% 37.76%
40.00% 32.70%
30.00%
20.00%
10.00%
0.00%

2016 2017 2018 2019 2020

INTERPRETATION:
This ratio indicates the return on the equity share capital. The higher the ratio, the
better the owners like it. Return on equity share capital is highest in 2018 is 54.16%
and least in 2016 is 32.70%. Owners a are more interested with this ratio since it
indicates the success of the bank in generating earning on their behalf. The bank shows
that return on equity share capital is between 32.70%to 54.16% in five consecutive
years.

50
 4.2.14 RETURN ON INVESTMENT

TABLE 4.14 RETURN ON INVESTMENT

Particulars 2016 2017 2018 2019 2020

Net Profit 5102295.91 5897636.08 8482207.63 7140825 5834353.99
Capital
549155596.53 683340697.61 806594906.5 803039302.47 3404243186.6
Employed
Return On
0.92% 0.86% 1.05% 0.88% 0.17%
Investment

FIGURE 4.14 RETURN ON INVESTMENT

RETURN ON INVESTMENT
1.20%

1.00% 1.05%
0.92% 0.86% 0.88%
0.80%

0.60%

0.40%

0.20%
0.17%
0.00%

2016 2017 2018 2019 2020

INTERPRETATION:

This ratio indicates the return on capital employed in the business and it can be used to show
the efficiency of the bank. Return on investment is lowest in 2020 is 0.17% and highest in 2018
is 1.05%. Primary objective of making investment in any concern is to obtain satisfactory return
on capital invested. There is increase in the ratio in 2018 and then decreased by next two years.
The ratio shows in between 0.17% and 1.05% during five consecutive years.

51
4.2.15 INVENTORY TURNOVER RATIO

TABLE 4.15 INVENTORY TURNOVER RATIO

Particulars 2016 2017 2018 2019 2020

Cost of revenue
484676.57 758194.77 9308046.2 14724268.8 15816812.62
from operation
Average
179324.01 93360.5 990228.4 2838965.8 1426315.59
Inventory

Inventory
2.70 8.12 9.39 5.18 11.08
Turnover Ratio

FIGURE 4.15 INVENTORY TURNOVER RATIO

INVENTORY TURNOVER RATIO

2.7

11.08 8.12

5.18
9.39

2016 2017 2018 2019 2020

INTERPRETATION:

This ratio signifies the liquidity of the inventory. High inventory ratio in 2020 i.e., 11.08
times and high inventory turnover ratio indicates brisk sales. The ratio helps to identify
overstocking of inventory, if any. A low inventory turnover ratio in 2016 is 2.70 times this
indicates in blocking of funds in inventory. There is no standard ratio for the inventory
turnover. This ratio indicates an increase in the ratio in five consecutive years and it between
2.70 to 11.08.

52
4.2.16 WORKING CAPITAL TURNOVER RATIO

TABLE 4.16 WORKING CAPITAL TURNOVER RATIO

Particulars 2016 2017 2018 2019 2020

Net revenue from
484676.57 758194.77 9308046.2 14724268.8 15816812.62
operation
Net Working
523433814.34 653732510.63 774484947.39 767472743.28 793476123.91
Capital
Working Capital
0.0009 0.0011 0.012 0.20 0.021
Turnover Ratio

FIGURE 4.16 WORKING CAPITAL TURNOVER RATIO

WORKING CAPITAL TURNOVER RATIO

0.25

0.2 0.2
0.15

0.1

0.05

0.012 0.021
0 0.0009 0.0011
2016 2017 2018 2019 2020

INTERPRETATION

This ratio reflects the turnover off the banks networking capital in the year Working capital
turnover ratio is the ratio between the net revenue or turnover and the working capital of a
business. The ratio indicates how effectively a company uses the available funds for
streamlined production of goods or services. In 2020 working capital turnover ratio is 0.021
and in 2016 it shows 0.0009.

53
4.3 COMMON SIZE BALANCE SHEET (2016,2017,2018)
A common-size balance sheet is a balance sheet that displays both the numeric value and
relative percentage for total assets, total liabilities, and equity accounts.

TABLE 4..1. 17 COMMON SIZE BALANCE SHEET

PARTICULA
S
2016 2017 2018 2016 2017 2018

LIABILITIES

SHARE
15600300.00 15691740.00 15660385.00 1.29% 11.67% 1.09%
CAPITAL
936143837.2 1034122658. 1083796849.
DEPOSITS 77.63% 76.97% 75.90%
7 0 80
LOANS FOM
0.0004 0.00029 0.00021
GOVERNME 5000.00 4000.00 3002.00
% % %
NT

RESERVES 19534897.97 22046892.88 24844696.46 1.62% 1.64% 1.74%

RESERVES
FOR
69503936.00 52532825.00 42503523.00 5.76% 3.91% 2.97%
ARREARS OF
INTEREST
OTHER
127154155.6 155494924.6
FUNDS AND 77672578.66 6.44% 9.46% 10.89%
6 6
RESERVES
INTEREST TO
62517384.00 63066563.00 69181147.00 5.18% 4.69% 4.84%
BE PAID
EDUCATION 0.00029
40000.00 40000.00 0.002%
FUND %
GRANT,
23024.00 23024.00 23024.00 0.001% 0.0017% 0.001%
SUBSIDY
STAFF
PROVIDENT 4399275.00 5097346.00 6490266.00 0.36% 0.37% 0.04%
FUND

54
 STAFF
314000.00 579000.00 62900.00 0.02% 0.04% 0.004%
SECURITY
UNDIVIDED
PROFIT 3055046.12 3287616.12 387056.12 0.25% 0.24% 0.02%
SHARE
OTHER
337226.62 361133.62 395190.62 0.03% 0.02% 0.027%
LIABILITY

M.M.B. F 9357350.00 11183870.00 13820720.00 7.76% 0.83% 0.18%

ADVANCES
22338753.85 2439673.85 2590200.85 1.85% 0.18% 0.18%
TO BE PAID
UNDIVIDED
PROFIT
19121.00 19121.00 19122.00 0.001% 0.001% 0.001%
SHARE IN 3
YEAR
PROFIT AND
5102295.91 5897636.08 8482207.63 0.42% 0.43% 0.59%
LOSS A/C
TOTAL 1205819126. 1343507256. 1427821315.
100% 100% 100%
LIABILITIES 40 08 14

ASSETS
CASH IN 2167938.00 3095275.83 3146764.93 0.17% 0.23% 0.22%
HAND
CASH AT 487136460.80 621350889.05 694156544.11 40.39% 46.24% 48.61%
BANK
PUBLIC 9348438.00 10488438 10875084.00 0.77% 0.78% 0.76%
INVESTMENTS
OTHER 16338675.51 19097499.51 21192485.51 1.35% 1.42% 1.48%
INVESTMENTS
LOANS TO 564726606.40 5464406698 576983619.10 46.83% 42% 40.41%
MEMBERS
INTEREST TO 89028580.00 86170738 78719261.00 7.38% 6.41% 5.51%
BE RECEIVED
M.M.B. F 14528450.00 16840850 17578850.00 1.20% 1.25% 1.23%
FURNITURE 3669358.18 3799442.18 4325588.18 0.30% 0.28% 0.30%

55
 AND FITTINGS
FIXED ASSETS 7384393.44 7384393.44 1146993.44 0.61% 0.54% 0.08%
OTHER 6774584.00 7285828 6940740.00 0.56% 0.05% 0.48%
ASSETS
STOCK IN 108941.68 83305.68 1946496.48 0.009% 0.006% 0.13%
HAND
ADVANCE TO 4606700.39 3503898.39 4571488.39 0.38% 0.26% 0.32%
BE RECIEVED
RISK FUND

TOTAL 1205819126.40 1343507256.08 1427821315.14 100% 100% 100%

ASSETS

INTERPRETATION:
Reserves of the bank increased from 1.62% to 1.64% and increased to 1.74% from 2016 to 2017
and 2018 deposits decreased to 77.63% to 75.90% in 2016 to2018. Other funds increased to
6.44% to 10.89% in 2016 to 2018. In 2018 investment has increased to 1.35% to 1.48 %.
Cash at bank increased to 40.39% to 48.61% in 2016 to 2018.

4.4 COMMON SIZE BALANCE SHEET (2019, 2020)

TABLE 4..1.18 COMMON SIZE BALANCE SHEET

PARTICULARS PERCENTAGE

2019 2020 2019 2020

LIABILITIES

SHARE CAPITAL 15543945.00 15449010.00 1.00% 0.95%

DEPOSITS 1161276728 1191760086.62 74.90% 7.40%

LOANS FOM 2000.00 1000.00 0.00% 6.21%

GOVERNMENT
RESERVES 29756244.09 33564260.09 19.19% 2.08%

RESERVES FOR 54891060.00 68014975.00 3.54% 4.22%

ARREARS OF

56
 INTEREST

OTHER FUNDS 174676054.66 1899403654.65 11.26% 11.79%

AND RESERVES
INTEREST TO BE 71756066.00 71510700.00 0.46% 4.44%
PAID
EDUCATION FUND 4000.00 4000.00 0.00025% 0.0002%

GRANT, SUBSIDY 23024.00 23024.00 0.001% 0.001%

STAFF PROVIDENT 7178550.00 7237739.00 0.46% 0.44%

FUND
STAFF SECURITY 722000.00 722000.00 0.44% 0.044%

UNDIVIDED 4073516.12 43630169.12 0.26% 2.71%

PROFIT SHARE
OTHER LIABILITY 420870.62 458023.62 0.02% 0.02%

M.M.B. F 18155490.00 176675200.00 1.17% 10.97%

ADVANCES TO BE 4674674.65 3167231.15 0.30% 0.19%

PAID
UNDIVIDED 19121.00 19121.00 0.001% 0.0011%
PROFIT SHARE IN
3 YEAR
PROFIT AND LOSS 7140825.00 5834353.99 0.46% 0.36%
A/C
TOTAL 1550350169.34 1609772426.24 100% 100%
LIABILITIES

ASSETS
CASH IN HAND 3556590.28 4247508.03 0.22% 0.26%
CASH AT BANK 738257309.26 755202506.46 47.61% 46.91%
PUBLIC 11209584 11209584.00 0.72% 0.69%
INVESTMENTS
OTHER 24314585.51 2599403151.00 1.56% 1.61%
INVESTMENTS
LOANS TO 633337361.6 662649877.60 40.85% 41.16%

57
 MEMBERS
INTEREST TO BE 88923282 99177083.00 5.73% 6.16%
RECEIVED
M.M.B. F 23803550 23279550.00 1.53% 1.44%
FURNITURE AND 4671688.18 61069.95 0.30% 0.37%
FITTINGS
FIXED ASSETS 7384393.44 7384393.44 0.47% 0.45%
OTHER ASSETS 7331193 6629809.00 0.47% 0.41%
STOCK IN HAND 2592772.68 3213681.86 0.16% 0.19%
ADVANCE TO BE 4967859.39 4578331.39 0.32% 0.28%
RECIEVED
RISK FUND 100000.00 0.0006%
TOTAL ASSETS 1550350169.34 1609772426.24 100% 100%

INTERPRETATION:
Other funds and reserves increased 11.26% to 11.79% from 2019 to [Link] provident fund
decreased to 0.46% to 0.44% and advanced to be received decreased to 0.32% to 0.28% from
2019 to 2020. Loan to members increased to 40.85% to 41.16%. Cash in hand increased from
0.22% to 0.26% in 2019 to 2020.

4.5 COMPARATIVE BALANCE SHEET

A comparative balance sheet is a statement that shows the financial position of an organization
over different periods for which comparison is made or required. The financial position is
compared with 2 or more periods to depict the trend, direction of change, analyse and take
suitable actions.

4.5.1 Comparative Balance sheet as of 2016 and 2017

Table No.4.1.19
Increase /
Particulars 2016 2017 Proportion
Decrease
Liabilities
SHARE CAPITAL 15600300 15691740 91440 0.58%

58
 DEPOSITS 936143837.3 1034122658 97978820.73 10.46%
LOANS FOM
5000 4000 -1000 -20%
GOVERNMENT
RESERVES 19534897.97 22046892.88 2511994.91 12.85%
RESERVES FOR
ARREARS OF 69503936 52532825 -16971111 -24.41%
INTEREST
OTHER FUNDS AND
77672578.66 127154155.7 49481577 63.70%
RESERVES
INTEREST TO BE
62517384 63066563 549179 0.87%
PAID
EDUCATION FUND 40000 4000 0.00%
GRANT , SUBSIDY 23024 23024 0 0.00%
STAFF PROVIDENT
4399275 5097346 698071 15.86%
FUND
STAFF SECURITY 314000 579000 265000 84.39%
UNDIVIDED PROFIT
3055046.12 3287616.12 232570 7.61%
SHARE
OTHER LIABILITY 337226.62 361133.62 23907 7.08%

M.M.B.F 9357350 11183870 1826520 19.51%

ADVANCES TO BE
22338753.85 2439673.85 -19899080 89.07%
PAID
UNDIVIDED PROFIT
19121 19121 0 0.00%
SHARE IN 3 YEAR
PROFIT AND LOSS
5102295.91 5897636.08 795340.17 15.58%
A/C
TOTAL LIABILITIES 1205819126.40 1343507256.1 137688129.7 11.41%

59
 Assets

CASH IN HAND 2167938 3095275.83 927337.83 42.77%

CASH AT BANK 487136460.8 621350889.1 134214428.3 27.55%

PUBLIC
9348438 10488438 1140000 12.19%
INVESTMENTS

OTHER
16338675.51 19097499.51 2758824 16.88%
INVESTMENTS

LOANS TO
564726606.4 5464406698 -319908.4 -0.05%
MEMBERS

INTEREST TO BE
89028580 86170738 -2857842 -3.21%
RECEIVED

M.M.B.F 14528450 16840850 2312400 15.91%

FURNITURE
3669358.18 3799442.18 130084 3.54%
AND FITTINGS
FIXED ASSETS 7384393.44 7384393.44 0 0

OTHER ASSETS 6774584 7285828 -6691278.32 -98.77%

STOCK IN HAND 108941.68 83305.68 108941.68 0

ADVANCE TO
4606700.39 3503898.39 -1102802 -23.93%
BE RECIEVED

RISK FUND

Total assets 1205819126.40 1343507256.1 137688129.7 11.41%

Interpretation:
The comparative balance sheet of 2016 and 2017 showing that bank their share capital,
deposits, reserves, and staff security fund, in the ratio of 0.58%,10.46%,12.85%,84.39%.
The other assets decreased in to 98.77%.

60
 4.5.2 COMPARATIVE BALANCE SHEET AS OF 2017 AND 2018
TABLE 4.1.20

Particulars 2017 2018 Increase /Decrease Proportion

Liabilities
SHARE CAPITAL 15691740 15660385 -31355 -0.19%
DEPOSITS 1034122658 1083796850 49674191.8 4.80%
LOANS FOM
4000 3002 -998 -24.95%
GOVERNMENT
RESERVES 22046892.88 24844696.46 2797803.58 12.69%
RESERVES FOR
ARREARS OF 52532825 42503523 -10029302 19.09%
INTEREST
OTHER FUNDS
127154155.7 155494924.7 28340769 22.28%
AND RESERVES
INTEREST TO BE
63066563 69181147 6114584 9.69%
PAID
EDUCATION
40000 40000 36000 9%
FUND
GRANT ,
23024 23024 0 0.00%
SUBSIDY
STAFF
PROVIDENT 5097346 6490266 792920 13.91%
FUND
STAFF SECURITY 579000 62900 -516100 89.13%
UNDIVIDED
3287616.12 387056.12 -2900560 -88.22%
PROFIT SHARE
OTHER
361133.62 395190.62 34057 9.43%
LIABILITY
M.M.B.F 11183870 13820720 2636850 23.57%
ADVANCES TO
2439673.85 2590200.85 150527 6.16%
BE PAID
UNDIVIDED
PROFIT SHARE 19121 19122 0 0.00%
IN 3 YEAR
PROFIT AND
5897636.08 8482207.63 2584571.55 43.82%
LOSS A/C
TOTAL
1343507256.1 1427821315.14 84314059.06 6.27%
LIABILITIES

Assets
CASH IN HAND 3095275.83 3146764.93 51489.1 1.66%
CASH AT BANK 621350889.1 694156544.1 72805655.06 11.71%

61
 PUBLIC 10488438 10875084 386646 3.68%
INVESTMENTS
OTHER 19097499.51 21192485.51 1494986 7.58%
INVESTMENTS

LOANS TO 5464406698 576983619.1 12516921.1 2.21%

MEMBERS

INTEREST TO BE 86170738 78719261 -7451477 -8.64%

RECEIVED

M.M.B.F 16840850 17578850 738000 4.38%

FURNITURE AND 3799442.18 4325588.18 526146 13.84%

FITTINGS
FIXED ASSETS 7384393.44 1146993.44 -6237400 -84.46%
OTHER ASSETS 7285828 6940740 6857434.32 8231.65%

STOCK IN HAND 83305.68 1946496.48 1946496.48 0.00%

ADVANCE TO BE 3503898.39 4571488.39 1067590 30.46%

RECIEVED

RISK FUND 84314059.06 6.27%

Total assets 1343507256.1 1427821315.14 84314059.06 6.27%

INTERPRETATION:
The comparative balance sheet of 2017 and 2018 showing that bank their deposits, reserves,
other investments in the ratio of 4.80%,12.69%,7.58%. The other assets decreased in to
98.77%.

4.5.3 COMPARATIVE BALANCE SHEET AS OF 2018 AND 2019

TABLE 4.1.21
Particulars 2018 2019 Increase / Proportion
Decrease
Liabilities
SHARE CAPITAL 15660385 15543945 -116440 -0.74%
DEPOSITS 1083796850 1161276728 77479878.2 7.14%
LOANS FOM 3002 2000 -1002 -33.37%

62
GOVERNMENT
RESERVES 24844696.46 29756244.09 4911547.63 19.76%
RESERVES FOR 42503523 54891060 12387537 29.14%
ARREARS OF
INTEREST
OTHER FUNDS 155494924.7 174676054.7 19181130 12.33%
AND RESERVES
INTEREST TO BE 69181147 71756066 2574919 3.72%
PAID
EDUCATION 40000 4000 -36000 90.00%
FUND
GRANT , 23024 23024 0 0.00%
SUBSIDY
STAFF 6490266 7178550 688284 10.60%
PROVIDENT
FUND
STAFF 62900 722000 659100 1047.85%
SECURITY
UNDIVIDED 387056.12 4073516.12 3686460 952.43%
PROFIT SHARE
OTHER 395190.62 420870.62 25680 6.49%
LIABILITY
M.M.B.F 13820720 18155490 4334770 31.36%
ADVANCES TO 2590200.85 4674674.65 2084473.8 80.47%
BE PAID
UNDIVIDED 19122 19121 0 0.00%
PROFIT SHARE
IN 3 YEAR
PROFIT AND 8482207.63 7140825 1341382.63 -15.81%
LOSS A/C
TOTAL 1427821315.14 1550350169 122528854.2 8.58%
LIABILITIES

Assets

CASH IN HAND 3146764.93 3556590.28 409825.35 13.02%

CASH AT BANK 694156544.1 738257309.3 668841655.2 96.35%

PUBLIC 10875084 11209584 334500 3.07%

INVESTMENTS
OTHER 21192485.51 24314585.51 3122100 14.73%
INVESTMENTS

63
 LOANS TO 576983619.1 633337361.6 56353742.5 9.76%
MEMBERS
INTEREST TO BE 78719261 88923282 10204021 12.96%
RECEIVED

M.M.B.F 17578850 23803550 6224700 35.41%

FURNITURE 4325588.18 4671688.18 346100 8%

AND FITTINGS
FIXED ASSETS 1146993.44 7384393.44 6237400 543.80%

OTHER ASSETS 6940740 7331193 390453 5.62%

STOCK IN HAND 1946496.48 2592772.68 646276.2 33.20%

ADVANCE TO 4571488.39 4967859.39 396371 8.67%

BE RECIEVED
RISK FUND

Total assets 1427821315.14 1550350169 122528854.2 8.58%

INTERPRETATION:
The comparative balance sheet of 2018 and 2019 showing that bank their deposits, reserves,
other liabilities in the ratio of 7.14%,19.76%,6.49%. The cash at bank increased to 96.35%
compared to 2017-2018.

4.5.4 COMPARATIVE BALANCE SHEET AS OF 2019 AND 2020

TABLE 4.1.22

Particulars 2019 2020 Increase /Decrease Proportion

Liabilities
SHARE 15543945 15449010 -94935 -0.61%
CAPITAL
DEPOSITS 1161276728 1191760087 30483358.62 2.62%
LOANS FOM 2000 1000 -1000 -50%
GOVERNMENT
RESERVES 29756244.09 33564260.09 3808016 12.79%
RESERVES FOR 54891060 68014975 13123915 23.90%
ARREARS OF
INTEREST

64
OTHER FUNDS 174676054.7 1899403655 1526431 0.99%
AND RESERVES
INTEREST TO 71756066 71510700 245360 0.34%
BE PAID
EDUCATION 4000 4000 0
FUND
GRANT , 23024 23024 0 0.00%
SUBSIDY
STAFF 7178550 7237739 59189 0.82%
PROVIDENT
FUND
STAFF 722000 722000 0
SECURITY
UNDIVIDED 4073516.12 43630169.12 39556653 971.06%
PROFIT SHARE
OTHER 420870.62 458023.62 37153 8.82%
LIABILITY
M.M.B.F 18155490 176675200 158519710 873.12%

ADVANCES TO 4674674.65 3167231.15 1507443.5 32.24%

BE PAID
UNDIVIDED 19121 19121 0
PROFIT SHARE
IN 3 YEAR
PROFIT AND 7140825 5834353.99 1306471.01 18.29%
LOSS A/C
TOTAL 1550350169.34 1609772426.24 59422256.9 3.83%
LIABILITIES

Assets
CASH IN HAND 3556590.28 4247508.03 690917.75 19.42%
CASH AT BANK 738257309.3 755202506.5 16945197.2 2.29%
PUBLIC 11209584 11209584 0 0
INVESTMENTS
OTHER 24314585.51 2599403151 1679446 6.90%
INVESTMENTS

LOANS TO 633337361.6 662649877.6 29312516 46.27%

MEMBERS

INTEREST TO BE 88923282 99177083 10253801 11.53%

RECEIVED

65
 M.M.B.F 23803550 23279550 -524000 -2.20%

FURNITURE AND 4671688.18 61069.95 1434381.77 30.70%

FITTINGS
FIXED ASSETS 7384393.44 7384393.44 0 0.00%
OTHER ASSETS 7331193 6629809 -701384 -9.56%

STOCK IN HAND 2592772.68 3213681.86 620909.18 23.94%

ADVANCE TO BE 4967859.39 4578331.39 389528 7.80%

RECEIVED

RISK FUND 100000 100000 0.00%

Total assets 1550350169.34 1609772426.24 59422256.9 3.83%

INTERPRETATION:
The comparative balance sheet of 2019 and 2020 showing that bank their deposits, reserves, other liabilities
,other investments in the ratio of 2.62%,12.79%,8.82%,6.90%. Stock in hand decreased up to 23.94%.

4.6 TREND ANALYSIS (2016,2017,2018)

Trend analysis evaluates an organization's financial information over a period of time. Periods may
be measured in months, quarters, or years, depending on the circumstances. The goal is to calculate
and analyze the amount change and percent change from one period to the next.
TABLE 4.1.23
PARTICULARS YEAR END (Rs.) TREND PERCENTAGES
Base year 2016
2016 2017 2018 2016 2017 2018

LIABILITIES
SHARE CAPITAL 15600300.00 15691740.00 15660385.00 100 100.58 100.38

DEPOSITS 936143837.27 1034122658.0 1083796849.80 100 110.46 115.77

LOANS FOM 5000.00 4000.00 3002.00 100 80 60.04

GOVERNMENT

66
 RESERVES 19534897.97 22046892.88 24844696.46 100 112.85 127.18

RESERVES FOR 69503936.00 52532825.00 42503523.00 100 75.58 61.15

ARREARS OF
INTEREST
OTHER FUNDS 77672578.66 127154155.66 155494924.66 100 163.7 200.19
AND RESERVES
INTEREST TO BE 62517384.00 63066563.00 69181147.00 100 100.87 110.65
PAID
EDUCATION 40000.00 40000.00 100 100 100
FUND
GRANT , 23024.00 23024.00 23024.00 100 100 100
SUBSIDY
STAFF 4399275.00 5097346.00 6490266.00 100 115.86 147.53
PROVIDENT
FUND
STAFF SECURITY 314000.00 579000.00 62900.00 100 184.39 20.03

UNDIVIDED 3055046.12 3287616.12 387056.12 100 107.61 12.66

PROFIT SHARE
OTHER 337226.62 361133.62 395190.62 100 107.08 117.18
LIABILITY
M.M.B.F 9357350.00 11183870.00 13820720.00 100 119.51 147.69
ADVANCES TO 22338753.85 2439673.85 2590200.85 100 10.92 11.59
BE PAID
UNDIVIDED 19121.00 19121.00 19122.00 100 100 100
PROFIT SHARE
IN 3 YEAR
PROFIT AND 5102295.91 5897636.08 8482207.63 100 115.58 166.24
LOSS A/C
TOTAL 1205819126.40 1343507256.08 1427821315.14 100 111.41 118.41
LIABILITIES

67
 ASSETS

CASH IN HAND 2167938.00 3095275.83 3146764.93 100 142.77 145.15

CASH AT BANK 487136460.80 621350889.05 694156544.11 100 127.55 142.49

PUBLIC 9348438.00 10488438 10875084.00 100 112.19 116.33

INVESTMENTS
OTHER 16338675.51 19097499.51 21192485.51 100 116.88 129.7
INVESTMENTS
LOANS TO 564726606.40 5464406698 576983619.10 100 99.94 102.17
MEMBERS
INTEREST TO 89028580.00 86170738 78719261.00 100 96.78 88.42
BE RECEIVED
M.M.B.F 14528450.00 16840850 17578850.00 100 115.91 120.99

FURNITURE 3669358.18 3799442.18 4325588.18 100 103.54 117.88

AND FITTINGS
FIXED ASSETS 7384393.44 7384393.44 1146993.44 100 100 15.53

OTHER ASSETS 6774584.00 7285828 6940740.00 100 107.54 102.45

STOCK IN 108941.68 83305.68 1946496.48 100 76.46 1786.73

HAND
ADVANCE TO 4606700.39 3503898.39 4571488.39 100 76.06 99.23
BE RECIEVED
RISK FUND 128.57 0

TOTAL ASSETS 1205819126.40 1343507256.08 1427821315.14 100 111.41 118.41

INTERPRETATION
In trend analysis 2016 is taken as the base year. Deposit increased from 110.46% to 115.77% in 2017
to 2018 and reserves also increased to 112.85% to 127.18%.Loan to members increased to 99.94%
to 102.17% in [Link] provident fund and cash at bank also increases. This shows the bank directed
towards the growth and the financial performance of the bank is now in good condition.

68
4.5 TREND ANALYSIS (2019, 2020)
TABLE 4.1.24
PARTICULARS YEAR END (Rs.) TREND PERCENTAGES
Base year 2016
2016 2019 2020 2016 2019 2020
LIABILITIES

SHARE CAPITAL 15600300.00 15543945 15449010 100 99.63 99.03

DEPOSITS 936143837.27 1161276728 1191760087 100 124.04 127.3

LOANS FOM 5000.00 2000 1000 100 40 20

GOVERNMENT
RESERVES 19534897.97 29756244.09 33564260.09 100 152.32 171.81

RESERVES FOR 69503936.00 54891060 68014975 100 78.97 97.85

ARREARS OF
INTEREST
OTHER FUNDS 77672578.66 174676054.7 1899403655 100 224.88 244.53
AND RESERVES
INTEREST TO BE 62517384.00 71756066 71510700 100 114.77 114.38
PAID
EDUCATION 4000 4000 100 100 100
FUND
GRANT , 23024.00 23024 23024 100 100 100
SUBSIDY
STAFF 4399275.00 7178550 7237739 100 163.17 164.52
PROVIDENT
FUND
STAFF SECURITY 314000.00 722000 722000 100 229.93 229.93

UNDIVIDED 3055046.12 4073516.12 43630169.12 100 133.33 142.81

PROFIT SHARE
OTHER 337226.62 420870.62 458023.62 100 124.8 135.82
LIABILITY
M.M.B.F 9357350.00 18155490 176675200 100 194.02 188.8

69
 ADVANCES TO 22338753.85 4674674.65 3167231.15 100 209.26 141.78
BE PAID
UNDIVIDED 19121.00 19121 19121 100 100 100
PROFIT SHARE IN
3 YEAR
PROFIT AND 5102295.91 7140825 5834353.99 100 139.95 114.34
LOSS A/C
TOTAL 1205819126.40 1550350169.34 1609772426.24 100 128.57 133.5
LIABILITIES

ASSETS
CASH IN 2167938.00 3556590.28 4247508.03 100 164.05 195.92
HAND
CASH AT 487136460.80 738257309.3 755202506.5 100 151.55 155.02
BANK
PUBLIC 9348438.00 11209584 11209584 100 119.9 119.9
INVESTMENTS
OTHER 16338675.51 24314585.51 2599403151 100 148.81 159.09
INVESTMENTS
LOANS TO 564726606.40 633337361.6 662649877.6 100 112.14 117.33
MEMBERS
INTEREST TO 89028580.00 88923282 99177083 100 99.88 111.39
BE RECEIVED
M.M.B.F 14528450.00 23803550 23279550 100 163.84 160.23

FURNITURE 3669358.18 4671688.18 61069.95 100 127.31 166.4

AND FITTINGS
FIXED ASSETS 7384393.44 7384393.44 7384393.44 100 100 100

OTHER 6774584.00 7331193 6629809 100 108.21 97.86

ASSETS
STOCK IN 108941.68 2592772.68 3213681.86 100 2379.96 2949.91
HAND
ADVANCE TO 4606700.39 4967859.39 4578331.39 100 107.83 99.38
BE RECIEVED

70
 RISK FUND 100000 128.57 0 100

TOTAL 1205819126.40 1550350169.34 1609772426.24 100 128.57 133.5

ASSETS

INTERPRETATION:
In trend analysis 2016 is taken as the base year. Other funds and reserves increased up to 224.88% to
244.53% in 2019 to 2020 .Advanced to be received decreased during 2020. Other liabilities increased
up to 135.82 in [Link] increased in 2020 in 127.3%.This growth shows that financial
performance of this bank is satisfactory. This shows the bank directed towards the growth and the
financial performance of the bank is now in good condition.

71
 CHAPTER 5
FINDINGS, RECOMMENDATIONS &
CONCLUSIONS

72
5.1 INTRODUCTION

The main intention of this chapter is to give a summary of the whole study that had been done and
to explain the core findings from the study. The chapter also deals with the major suggestions or
recommendations that can be put forth for further improvement of the study in the future.

5.2 SUMMARY
Financial performance analysis or financial statement analysis traces a company’s rise or falls from
its inception to the reporting date. Investors and financial analysts can review the firm’s operations
over many years, pinpointing specific parts of its business along the way. Accounting report review
refers to the way a company or investor analyses corporate performance and how the analyst
compares such performance to rivals’ achievements. Financial analysis of Ranni Service Co-
operative Bank showing that in terms of trend analysis, the common size balance sheet and
comparative balance sheet and ratio analysis were sound or in a good position. In future years also
it plays a good financial position.

5.3 FINDINGS

❖ According to common size balance sheet shows the reserves of the bank increased from 1.62%
to 1.64% and increased to 1.74% from 2016 to 2017 and 2018
❖ Deposits decreased to 77.63% to 75.90% in 2016 to2018 in the common size balance sheet
❖ Other funds increased to 6.44% to 10.89% in 2016 to 2018 and increased 11.26% to 11.79%
from 2019 to 2020.
❖ staff provident fund decreased to 0.46% to 0.44% and advanced to be received decreased to
0.32% to 0.28% from 2019 to 2020
❖ Cash at bank increased to 40.39% to 48.61% in 2016 to 2018. Cash in hand increased from
0.22% to 0.26% in 2019 to 2020.
❖ According to comparative balance sheet of 2016 and 2017 showing that bank their share
capital, deposits, reserves, and staff security fund, in the ratio of
0.58%,10.46%,12.85%,84.39%. The other assets decreased in to 98.77%.
❖ For the year 2017 and 2018 showing that bank their deposits, reserves, other investments in
the ratio of 4.80%,12.69%,7.58%. The other assets decreased in to 98.77%.
❖ The comparative balance sheet of 2018 and 2019 showing that bank their deposits, reserves,
other liabilities in the ratio of 7.14%,19.76%,6.49%. The cash at bank increased to 96.35%
compared to 2017-2018.

73
❖ For the year 2019 and 2020 showing that bank their deposits, reserves, other liabilities, other
investments in the ratio of 2.62%,12.79%,8.82%,6.90%. Stock in hand decreased up to
23.94%.
❖ According to trend analysis Deposit increased from 110.46% to 115.77% in 2017 to 2018
and reserves also increased to 112.85% to 127.18%. Loan to members increased to 99.94% to
102.17% in [Link] provident fund and cash at bank also increases.
❖ In trend analysis 2016 is taken as the base year. Other funds and reserves increased up to
224.88% to 244.53% in 2019 to 2020.
❖ Advanced to be received decreased during 2020. Other liabilities increased up to 135.82 in
[Link] increased in 2020 in 127.3% in trend analysis.
❖ Current ratio is decreased in 2019 as 9.11 then it increased to 9.59 in 2020, the high ratio
indicates solvency position of the bank
❖ Quick ratio is highest in 2017 is 9.45 and it decreased into 3 years. The ratio is more than 1:1
so, bank financial position is good
❖ Cash coverage ratio is lower in 2016 is 6.60 and it is increased in 2020 is 8.22
❖ Debt-equity ratio is 26.78 and it increased in 2017 and decreased in 2018,2019,2020
❖ For the year 2016 ,0.29 and it decreased in 2020 to 0.03 in proprietary ratio
❖ Solvency ratio is highest in 2016 is 0.84 and it shows decreased in other 4 year to 0.8
❖ Fixed asset ratio is lowest in 2016 and increased to 2017 is 0.53 and the remain same in 2020
❖ Gross profit ratio is lower in 2016 1.12 and in the year 2018 is 6.49 and 8. 45 in the year
2020
❖ Net profit increased in 2017 as 76.73 and increased in 2018 in 85.20 it also decreased in 2019
as 44.32
❖ In 2016 Return on equity share capital as 32.70 and it increased in 2020 as 37.76
❖ In the year 2018 return on investments as 1.05 and decreased in 2020 as 0.17
❖ In the year 2016 Fixed asset to net worth is 16.47 and it decreased in 2020 as 13.80

74
5.4 RECOMMENDATIONS

• They must analyze the factors influenced decrease of profitably of the bank in 2020.
• There should be a personal touch with the officers in the branch of a bank and the
customers or creditors to whom the credit is given.

• Proper investigation and evaluation of the financial statements and books of accounts need
to be maintained to see whether the creditors are regular in the payments of their loan.
• There should be an effective system to decrease the liabilities of the bank.
• They must increase the return on capital employed and find the reason for decrease in
return on capital employed in 2020.
• Banks should create a new model of banking business by giving loans to credit-worthy
persons having a clean credit history. There should be a personal touch with the officers
in the branch of a bank and the customers or creditors to whom the credit is given.
• Provide loans and advances to the borrowers only based on the proper documented and
valid securities and properties.
• The documents and securities should be easily tradable in the market in case of the default
made by the borrowers.

• Reduce political inference to an extent.

• With the help of new schemes and advertisements, the bank can attract more
members and increase its business.

• They must hold more current assets to cover the future current liabilities.
• They must keep a good hold on fixed assets. To maintain the financial stability

• People should be made more aware about the offers and interest rates offered by the
bank. The existing staffs of the bank should be given more training to use the computer.
This will help in reducing the time consumption. The bank should provide ATM
facilities.

• There should be more liquid cash, to payback short term liabilities.

75
5.5 CONCLUSION

Financial performance analysis is the process of identifying the financial strengths and weaknesses of
the bank by properly establishing the relationship between the items of the balance sheet and the
profit and loss account. The analysis of a financial statement is a process of evaluating the relationship
between the parts of the financial statement to obtain a better understanding of the firms’ position and
performance.
The financial analysis determines the bank health and stability, providing an understanding of how the
bank conducts its business. But it is important to know that financial statement analysis has its
limitations as well. By going through various analyses like trend analyses, common-size balance
sheets, comparative balance sheets and ratio analysis I could found that the financial performance of
the bank is in a good position. Some ratios show decrease in year, but it comparatively rises in the
next year. Efficiency and solvency position of the bank is good. This bank also attains super grade in
the field of cooperative banks. Compared with 2016,2017,2018,2019,2020, the bank is performing in
a positive [Link], the overall conclusion for this internship is that the financial performance of
Ranni Service Co- Operative Bank of Pathanamthitta district Kerala is now in a good position.

76
BIBILOGRAPHY & APPENDIX
 BIBLIOGRAPHY
• [Link]
• [Link]
ii/financial-statement-analysis/ratio-analysis
• [Link]
• Annual report of Ranni Service Co-operative Bank
• The audit report of Ranni Service Co-operative Bank.

BALANCE SHEET FOR LAST 5 YEAR

BALANCE SHEET 2016,2017,2018,2019,2020

PARTICULARS 2016 2017 2018 2019 2020

Liabilities
Share Capital 15600300.00 15691740.00 15660385.00 15543945.00 15449010.00
Deposits 936143837.27 1034122658.87 1083796849.80 1161276728.00 1191760086.62
Loans from Govt 5000.00 4000.00 3002.00 2000.00 1000.00
Reserve
General Reserve 8238497.84 9003841.84 9888486.84 11160818.84 12231813.00
A.C.F fund 4100198.67 4829611.67 5645409.67 6640478.67 7585315.67
Building fund 4031459.86 4527825.77 5083619.85 7205514.48 8367469.48
Public welfare fund 926365.30 1007237.30 1088803.80 1111055.80 1241155.80
Dividend 1780520.30 2080520.30 2580520.30 3080520.30 3580520.30
Equilaization Fund
ACS fund 166858.00 166858.00 166858.00 166858.00 166858.00
(Govt,profit share)
Reserves for creditors 27603.00 27603.00 27603.00 27603.00 27603.00
Member Relief fund 263395.00 363395.00 363395.00 3633995.00 363395.00
Debentures in 129.63
motgage bank
Reserves for arrears 69503936.00 52532825.00 42503523.00 54891060.00 68014975.00
of interest
other fund,reserves 77672578.66 127154155.66 155494924.66 174676054.66 189940365.65
Interest to be paid 62517384.00 63066563.00 69181147.00 71756066.00 71510700.00
Education fund 40000.00 40000.00 4000.00 4000.00
Grant,Subsidy 23024.00 23024.00 23024.00 23024.00 23024.00
Staff Provident fund 43992725.00 5097346.00 6490266.00 7178550.00 7237739.00
staff security 314000.00 579000.00 62900.00 722000.00 722000.00
Undivided Profit 3055046.12 3287616.12 387056.12 4073516.12 4363016.12
share
other liability 337226.62 361133.62 395190.62 420870.62 458023.62
M.M.B.F 9357350.00 11183870.00 13820720.00 18155490.00 17667520.00
Advances to be paid 2233853.85 2439673.85 2590200.85 4674674.65 316723115.00
Undivided Profit 19121.00 19121.00 19122.00 19121.00 19121.00
share in 3 year
Profit and Loss A/C 5102295.91 5897636.08 8482207.63 7140825.00 5834353.99
TOTAL 1205819126.40 1343507256.08 1427821315.14 1550350169.34 1609772426.24

ASSET SIDE

Cash in hand 2167938.00 3095275.83 3146764.93 3556590.28 4247508.03

Cash in bank 487136460.80 621350889.05 694156544.11 73825730.26 755202506.5

Public 9348438.00 10488438.00 10875084.00 11209584.00 11209584.00

Investments
Other 16338675.51 19097499.51 21192485.51 24314585.51 2599403151.00
Investments
Loan to 564726606.40 564406698.00 576983619.10 6333373661.60 662649877.60
members
Interest to be 89028580.00 86170738.00 78719261.00 88923282.00 99177083.00
received
M.M.B.F 14528450.00 16840850.00 17578850.00 23803550.00 23279550.00

Furiture and 3669358.18 3799442.18 4325588.18 4671688.18 6106069.95

fittings
Fixed Assets

Land 6930488.29 6930488.29 453905.15 453905.15 453905.15

Buildings 456905.15 453905.15 6930488.29 6930488.29 6930488.29

other assets 6774584.00 7285828.00 6940740.00 7331193.00 6629809.00

Risk fund 10000.00

Business stock 74273.00 61056.21 1904106.80 1869718.00 2478689.18

Dead stock 34668.68 22249.47 42389.68 42389.68 54327.68

Loss due to 680665.00 680665.00

floods
Advances to be 4606700.39 3503898.39 4571488.39 4967859.39 4578331.39
received
TOTAL 1205819126.40 1343507256.08 1427821315.14 1550350169.34 1609772426.24
 PROFIT AND LOSS ACCOUNT FOR LAST 5 YEARS

PARTICULARS 2016 2017 2018 2019 2020

INCOME

Gross Profit 5525.77 10388.68 646868.8 1385994.2 1460326.88

Interest on loan 81560352.00 81168894.50 79361531.00 80409244.00 78963536.00

Interest earned on 58967032.00 61866662.00 62462620.00

deposits
Miscellaneous income 44807408.00 59805197.00 3912393.50 3299510.00 4146170.00

Reserves for 3 years 65805911.00 69503936.00 52532825.00 42503523.00 54891060.00

arrears of interest
Reserve for previous 1400000.00
year tax
Provison for previous 2453538.00 2946947.00 3382369.00 3754773.00 4137968.00
year vacation pay
Reserve for previous 3469750.00 2648750.00 2611750.00 2271250.00 2326750.00
year arrears in
MMBF
Reserve for previous 25498020.00 23225190.00 24375050.00 14700600.00 16178325.00
year arrears of GRD
Reserve for previous 9027519.00 15457841.00 13413551.00 20029278.00 19318206.00
year bad debt
Reserve for previous year damaged 722402.00
furniture
Building recoupment 204368.54
reserve
Reserve for previous 2741.00
year depleted goods

TOTAL INCOME 232628023.0 254767144.18 239206111.3 230220834.20 246211732.42

EXPENDITURE

Interest on Loan 82607127.00 88391027.00 97650331.00 91616347.00 91238743.00

Establishment 9085479.00 9149555.00 10534189.00 11722919.00 13514503.00

Expenses
Contingency 3631196.86 5035796.00 7909630.67 4912652.20 7379924.67
Expenses
General Reserve 55000000.00 2000000.00

Depreciation Fund 361719.00 316581.00 432789.00 484275.00 833557.20

 Reserve for 113000.00
Depreciation
Reserve for arrears of 69503936.00 52532825.00 42503523.00 54891060.00 68014975.00
Interest
Reserve for bad debt 15457841.00 13413551.00 20029278.00 19318206.00 20290953.00

Reserve for bank 15000000.00 7500000.00

branch
Reserve for depleted 10462.00 11938.00
goods
Reserve for damaged 722402.00
furniture
Reserve for arrears of 23225190.00 24375050.00 14700600.00 16178325.00 13357175.00
GRD
Reserve for damaged 680665.00
caused by flood
Reserve for arrears in 2648750.00 2611750.00 2271250.00 2326750.00 2002250.00
MMBF
Provison for vacation 2946947.00 3382369.00 3754773.00 4137968.00 3644673.00
pay
Provison for advance 4694.16
recievables
Provison for core 56000000.00 2500000.00 2500000.00
banking
Reserve for current 19800000.00
liability
Reserve for medical 5000000.00
diagonostic center
Recoupment fund 557542.00 437542.00 437540.00 388440.00 283992.40

Reserve for start a 7000000.00

branch
Reserve for Neethi 1300000.00 1500000.00 5000000.00 1200000.00
Medical Store
Provison for bank 3000000.00 9500000.00 9500000.00
office renovation
Provison for 600000.00
computer hardware
Reserve for income 200000.00 500000.00 500000.00
tax
NET PROFIT 5102295.91 5897636.08 8482207.63 7140825.00 5834353.99

TOTAL 232628023.00 254767144.18 239206111.3 230220834.20 246211732.420

EXPENDITURE