CHAPTER I
INTRODUCTION
1.1 Background of the Study
Financial ratio analysis is one of the best tools of performance evaluation of any financial or
company. In order to determine the financial position of the financial and to make a judgment of
how well the financial efficiency, its operation and management and how well the financial has
been able to utilize its assets and earn profit.
It is used ratio analysis for easily measurement of liquidity position, assets management
condition, profitability and market value and debt coverage situation of the financial for
performance evaluation. It analysis the company use of its assets and control of its expenses. It
determines the greater coverage of liquid assets to short term liabilities and it also compute
ability to pay financial monthly mortgage payments from the cash generate. It determines of
share market condition and also used to analysis the past financial performance and to establish
the future trend of financial position.
Ratio is the expression of one figure in terms of another’s. It is the expression of the relationship
of the mutually independent figures, it is simple mathematical expression of the relationship of
one item to another. Absolute figure alone convey no meaning unless they are interrelated to
existed among various accounting data. Therefore, ratio refers to the numerical or quantitative
relationship between terms of a then and can be worked out by dividing the number to another.
Financial in a community can perform the core of economic development because of different
reasons such as:
Provide money for personal borrowings.
Provide banking service in rural area.
Provide loan in low interest rates.
Therefore, financial play a vital role in developing the economic in rural or town area, through
them the stream money are manage and controlled, investment opportunities are utilized and
high economic growth rate.
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1.2 Profile of Organization
After completion of all regularity requirements, Division financial had issued financial saving
it’s operating License on 25th Falgun 2068 and the financial bank had started operating activities
with 26 Founder members. It is situated in Ramgram -10, Parasi, Nawalparasi. The chairman of
this financial is Bindiya chhetri pradhan and Maheshwor chaudhary is the manager of this
financial bank. It is the best financial bank in its area. It provides various types of facilities. Like,
saving etc. It is accepting various kinds of saving, such as, monthly saving, optional saving,
Balbachat, fixed deposit, etc. Loan facility is given to people at 15% interest annually.
Remittance service is also provided in this financial.
1.3 Statement of the Problems
All the above contents explain here the importance of ratio analysis of Womi laghubitta bittiya
Sanstha Ltd. Though financial bank have been established with laudable objective, they are
suffering from various problems and as a result, their financial performance is very precarious.
Nowadays the WLBS is facing different problems which are mentioned below:
What is the liquidity position of the financial ?
What is the profitability position of the financial ?
1.4 Objectives of the study
The major objectives of the resent study are to know about financial strengths and weakness
of the financial which can be summarizing in the following points.
To identify the liquidity position of the financial.
To identify the profitability ratio of the financial.
1.5 Rationale of the study
The rational of the study is mainly focuses on the various problems. This rational importance is
maintained by the project work report, entitled on ratio analysis of Womi laghubitta bittiya
sanstha Ltd. This study is based on important and significance of ratio analysis. The main
importance of this study is to analyze financial ratio of the financial.
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1.6 Methodology
Any study will be impossible without research and data collection for which field survey as
necessary. The research methodology of the study are research design, nature and sources of
data, data collection technique and data presentation and analysis tools will followed for
collection of data.
1.6.1 Research design
Research design is a master plan, regarding the method and procedure of investigation.
Analytical and descriptive research design will be used to invest the research objectives.
1.6.2 Sources and techniques of data collection
While preparing this report data are collected from secondary sources. To analyze the ratio
analysis for the researcher used quantitative data. There are different methods of collection data
in order to obtain various data among them. In study mainly secondary data are used. This data
will be obtained from various sources like.
Secondary data
While preparing this report secondary data of the financial will be used. Secondary data is
available data. It refers to existing data collected earlier. The sources of secondary data are as
follows:
Annual reports
Unpublished sources
Publications.
1.6.3 Data presentation analysis tools
While preparing this field work report, following tools will be used for data presentation.
Table
Trend line
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1.7 Limitation of the study
The major limitations associated with this research proposal are listed as follows: The study is
mainly based on secondary data.
a. The data will be used from F/Y 2071/072 to 2075/076.
b. Limited tools and techniques are used for data analysis.
