EXECUTIVE SUMMARY

Banking sector, the world over, is known for the adoption of multidimensional strategies from
time to time with varying degrees of success. Banks are very important for the smooth
functioning of financial markets as they serve as repositories of vital financial information and
can potentially alleviate the problems created by information asymmetries. In any
organization, the two important financial Analysis are the Balance sheet & Profit and loss
account of the business. Balance sheet is a statement of the financial position of an enterprise
at a particular point of time. Profit and loss account shows the net profit or net loss of a
company for a specified period of time. When these Analyses of the last few year of any
organization are studied and analyzed, significant conclusions may be arrived regarding the
changes in the financial position, the important policies followed and trends in profit and loss
etc. Analysis and interpretation of the financial statement has now become an important
technique of credit appraisal. The investors, financial experts, management executives and the
bankers all analyze thesestatements.

Though the basic technique of appraisal remains the same in all the cases but the approach
and the emphasis in analysis vary. A banker interprets the financial statement so as to evaluate
the financial soundness, stability, the liquidity position and the profitability or the earning
capacity of borrowing concern. Analysis of financial statement is necessary because it help in
depicting the financial position on the basis of past and current records. Analysis of financial
statement helps in making the future decision andstrategies.

Therefore, it is very necessary for every organization whether it is a financial company or

manufacturing company to make financial statement and to analysis it. After duly
recognizing the importance of financial statement analysis, this topic has been chosen as the
focus of project. It analyses the financial statement of AXIS BANK from 2016 to2021.

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 CHAPTER – I
INTRODUCTION

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 Financial Analysis refers to such Analysis which contains financial information about an
enterprise. They report profitability and the financial position of the business at the end of
accounting period. The team financial statement includes at least two Analysis which the
accountant prepares at the end of an accounting period. The two Analysis are: -

• The BalanceSheet
• Profit And LossAccount

They provide some extremely useful information to the extent that balance Sheet mirrors the
financial position on a particular date in terms of the structure of assets, liabilities and owners
equity, and so on and the Profit And Loss account shows the results of operations during a
certain period of time in terms of the revenues obtained and the cost incurred during the year.
Thus the financial statement provides a summarized view of financial positions and operations
of afirm.

Meaning of Financial Analysis

The term financial analysis is also known as ‘analysis and interpretation of financial
statements’ refers to the process of determining financial strength and weakness of the firm
by establishing strategic relationship between the items of the Balance Sheet, Profit and Loss
account and other operative data.
The first task of financial analysis is to select the information relevant to the decision under
consideration to the total information contained in the financial statement. The second step is
to arrange the information in a way to highlight significant relationship. The final step is
interpretation and drawing of inference and conclusions. Financial statement is the process of
selection, relation and evaluation.

Features of Financial Analysis

• To present a complex data contained in the financial statement in simple and understandable
form.

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 • To classify the items contained in the financial statement in convenient and rational groups.

• To make comparison between various groups to draw variousconclusions.

Purpose of Analysis of financial statements

• To know the earning capacity orprofitability.
• To know thesolvency.
• To know the financialstrengths.
• To know the capability of payment of interest &dividends.
• To make comparative study with otherfirms.
• To know the trend ofbusiness.
• To know the efficiency ofmgt.
• To provide useful information tomgt.

Procedure of Financial Statement Analysis

The following procedure is adopted for the analysis and interpretation of
Financial statements:-

• The analyst should acquaint himself with principles and postulated of accounting. He should
know the plans and policies of the management so that he may be able to find out whether
these plans are properly executed ornot.

• The extent of analysis should be determined so that the sphere of work may be decided. If the
aim is find out. Earning capacity of the enterprise then analysis of income statement will be
undertaken.

• The financial data be given in statement should be recognized and rearranged. It will involve
the grouping similar data under same heads. Breaking down of individual components of
statement according to nature. The data is reduced to a standardform.

• A relationship is established among financial Analysis with the help of tools & techniques of
analysis such as ratios, trends, common size, fund flowetc.

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 • The information is interpreted in a simple and understandable way. The significance and
utility of financial data is explained for help in decisionmaking.

• The conclusions drawn from interpretation are presented to the management in the form
ofreports.

• Types Of FinancialAnalysis
There are different ways of analysis the financial statements:

• On The Basis Of Process OfAnalysis

• Horizontal Analysis: This is used when the financial statement of a number of years are to be
analyzed. Such analysis indicates the trends and the increase or decrease in various items not
only in absolute figures but also in percentage form. This analysis indicates the strengths and
weaknesses of the firm. This analysis is also called as dynamic analysis because it also shows
the trend of thebusiness.

• Vertical Analysis : This is used when financial Analysis of a particular year or on a particular
date are analyzed. For this type of analysis we generally use common size Analysis and the
ratio analysis. It involves a study of quantitative relationship among various items of balance
sheet and profit and loss account. This type of analysis is static analysis because this is based
on the financial results of one year. Vertical analysis is useful when we have to compare the
performance of different departments of the samecompany.

Among these two types of analysis, horizontal analysis is more useful because it brings out
more clearly the trends of working of a firm. This gives us more concrete bases for future
planning.

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 On The Basis Of InformationAvailable

• Internal Analysis: This analysis is based on the information available to the business firm
only .Hence internal analysis is made by the management. Internal analysis is more reliable
and helpful for financialdecisions.

• External Analysis : This analysis is made on the basis of published statements, reports and
informations. This analysis is made by external parties such as creditors, investors, banks,
financial analysis etc. external analysis is less reliable in comparison to internal analysis
because of limited and often incompleteinformation.

• On The Basis Of Number OfFirms

• Inter-Firm Analysis: When financial analysis of two or more companies or firms are
analyzed and compared over a number of accounting period, it is called inter-firm analysis.

• Intra -Firm Analysis:intra-firm analysis is concerned with the analysis of financial

performance of different units or departments or segments of the same enterprise or company.
Similarly when financial Analysis of two or more years of the same firm are analyzed and
compared it is also called as intra-firmanalysis.

• On The Basis OfObjectives

• Accounting Analysis: Accounting analysis is analysis of past financial performance
and involves examining how generally accepted accounting principles and conventions have
been applied in arriving at the values of assets, liabilities, revenues andexpenses.

• Prospective Analysis : Prospective analysis involves developing forecasted

financial Analysis keeping in view the changes that are likely to shape and affect the business
given the assumptions about these changes and the limitation of the forecasting technique
used. This is quite complicatedanalysis.

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 Methods/Tools of Financial Analysis
A number of methods can be used for the purpose of analysis of financial statements. These
are also termed as techniques or tools of financial analysis. Out of these, and enterprise can
choose those techniques which are suitable to its requirements. The principal techniques of
financial analysis are:-

• Comparative financialstatements
• Common-sizestatements
• Trendanalysis
• Ratioanalysis
• Funds flowanalysis
• Cash flowanalysis
• Breakeven pointanalysis

a. Comparative Financial Statements:

When financial Analysis figures for two or more years are placed side-side to facilitate
comparison, these are called ‘comparative Financial Statements’. Such Analysis not only
show the absolute figures of various years but also provide for columns to indicate to increase
or decrease in these figures from one year to another. In addition, these Analysis may also
show the change from one year to another on percentage form. Such cooperative Analysis are
of great value in forming the opinion regarding the progress of the enterprise.

FINANCIAL ANALYSIS:

After preparation of the financial statements(Balance Sheet and Trading and Profit and Loss
Account), one may be interested in analyzing the financial Analysis with the help of different
tools such as comparative statement, common size statement, ratio analysis, trend analysis,
etc.
Objectives:
• To explain the meaning, need and purpose of financial statementanalysis;
• To identify the parties interested in analysis of financialstatements;
• To explain the various techniques and tools of analysis of financialstatements.

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 Financial Statement Analysis (Meaning and Purpose):
We know business is mainly concerned with the financial activities. In order to ascertain the
financial status of the business every enterprise prepares certain statements, known as
financial statements. Financial Analysis are mainly prepared for decision making purposes.
But the information as is provided in the financial Analysis is not adequately helpful in
drawing a meaningful conclusion. Thus, an effective analysis and interpretation of financial
Analysis is required.

Analysis means establishing a meaningful relationship between various items of the two
financial Analyses with each other in such a way that a conclusion is drawn. By financial
Analysis we mean two statements:
• Profit and loss Account or IncomeStatement
• Balance Sheet or PositionStatement

These are prepared at the end of a given period of time. They are the indicators of profitability
and financial soundness of the business concern. The term financial analysis is also known as
analysis and interpretation of financial statements. It determines financial strength and
weakness of the firm. Analysis of financial Analysis is an attempt to assess the efficiency and
performance of the enterprise. Thus, the analysis and interpretation of financial Analysis is
very essential to measure the efficiency, profitability, financial soundness and future prospects
of the business units. Financial analysis serves the followingpurposes:

• Measuring theprofitability
• Indicating the trend ofachievement
• Assessing the growth potential of thebusiness
• Comparative position in relation to otherfirms
• Assess overall financialstrength
• Assess solvency of thefirm

Techniques and Tools of Financial Statement Analysis:

Financial Analysis gives complete information about assets, liabilities, equity, reserves,
expenses and profit and loss of an enterprise. They are not readily understandable to interested
parties like creditors, shareholders, investors etc. Thus, various techniques are employed for
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 analyzing and interpreting the financial statements. Techniques of analysis of financial
Analysis are mainly classified into threecategories:
• Cross-sectionalanalysis
It is also known as interring firm comparison. This analysis helps in analyzing financial
characteristics of another similar enterprise in that accounting period.
• Time seriesanalysis
It is also called as intra-firm comparison. According to this method, the relationship between
different items of financial statement is established, comparisons are made and results
obtained. The basis of comparison may be:
• Comparison of the financial Analysis of different years of the same business unit.
• Comparison of financial statement of a particular year of different business units.
• Cross-sectional cum time series analysis
This analysis is intended to compare the financial characteristics of two or more enterprises
for a defined accounting period. It is possible to extend such a comparison over the year. This
approach is most effective in analyzing of financial statements.
The analysis and interpretation of financial Analysis is used to determine the financial
position. A number of tools or methods or devices are used to study the relationship between
financial statements. However, the following are the important tools which are commonly

used for analyzing and interpreting financial statements: Ratio analysis, Comparative
financial statements, Common size statements, Trendanalysis.

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 CHAPTER – II
INDUSTRY PROFILE

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 As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently capitalized and
well-regulated. The financial and economic conditions in the country are far superior to any
other country in the world. Credit, market and liquidity risk studies suggest that Indian banks
are generally resilient and have withstood the global downturn well.

Indian banking industry has recently witnessed the roll out of innovative banking models like
payments and small finance banks. RBI’s new measures may go a long way in helping the
restructuring of the domestic banking industry.

The digital payments system in India has evolved the most among 25 countries with India’s
Immediate Payment Service (IMPS) being the only system at level five in the Faster Payments
Innovation Index(FPII).*

Market Size

The Indian banking system consists of 12 public sector banks, 22 private sector banks, 46
foreign banks, 56 regional rural banks, 1485 urban cooperative banks and 96,000 rural
cooperative banks in addition to cooperative credit institutions As of November 2020, the
total number of ATMs in India increased to 209,282.

Asset of public sector banks stood at Rs. 107.83 lakh crore (US$ 1.52 trillion) in FY20.

During FY16-FY20, bank credit grew at a CAGR of 3.57%. As of FY20, total credit extended
surged to US$ 1,698.97 billion. During FY16-FY20, deposits grew at a CAGR of 13.93% and
reached US$ 1.93 trillion byFY20.

According to the RBI, bank credit stood at 108.79 trillion (US$ 1.46 trillion) and bank
deposits stood at Rs. 155.14 trillion (US$ 2.08 trillion), as of July 16, 2021.

Credit to non-food industries stood at Rs. 107.93 trillion (US$ 1.45 trillion), as of July 16,
2021.

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 Investments/Developments

Key investments and developments in India’s banking industry include:

In July 2021, Google Pay for Business has enabled small merchants to access credit through
tie-up with the digital lending platform for MSMEs—FlexiLoans.
In December 2020, in response to the RBI’s cautionary message, the Digital Lenders’
Association issued a revised code of conduct for digital lending.
As of June 23, 2021, the number of bank accounts—opened under the government’s flagship
financial inclusion drive ‘Pradhan Mantri Jan Dhan Yojana (PMJDY)’—reached 42.55 crore
and deposits in Jan Dhan bank accounts totalled >Rs. 1.44 lakh crore (US$ 19.31 billion).
On November 6, 2020, WhatsApp started UPI payments service in India on receiving the
National Payments Corporation of India (NPCI) approval to ‘Go Live’ on UPI in a graded
manner.
In October 2020, AXIS Bank and Apollo Hospitals partnered to launch the ‘HealthyLife
Programme’, a holistic healthcare solution that makes healthy living accessible and affordable
on Apollo’s digitalplatform.
In 2019, banking and financial services witnessed 32 M&A (merger and acquisition) activities
worth US$ 1.72billion.
In March 2020, State Bank of India (SBI), India’s largest lender, raised US$ 100 million in
green bonds through private placement.
In February 2020, the Cabinet Committee on Economic Affairs gave its approval for
continuation of the process of recapitalization of Regional Rural Banks (RRBs) by providing
minimum regulatory capital to RRBs for another year beyond 2019-20 - till 2020-21 to those
RRBs which are unable to maintain minimum Capital to Risk weighted Assets Ratio (CRAR)
of 9% as per the regulatory norms prescribed by RBI.
The NPAs (Non-Performing Assets) of commercial banks recorded a recovery of Rs. 400,000
crore (US$ 57.23 billion) in the last four years including record recovery of Rs. 156,746 crore
(US$ 22.42 billion) in FY19.

Government Initiatives

In August 2021, Prime Minister Mr. Narendra Modi launched e-RUPI, a person and purpose-
specific digital payment solution. e-RUPI is a QR code or SMS string-based e-voucher that is

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 sent to the beneficiary’s cell phone. Users of this one-time payment mechanism will be able to

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 redeem the voucher at the service provider without the usage of a card, digital payments app,
or internet bankingaccess.
As per Union Budget 2021-22, the government will disinvest IDBI Bank and privatise two
public sector banks.
As per Union Budget 2019-20, the Government proposed fully automated GST refund module
and an electronic invoice system that will eliminate the need for a separate e-way bill.
Government smoothly carried out consolidation, reducing the number of Public Sector Banks
byeight.
As of September 2019, the Government of India made Pradhan Mantri Jan Dhan Yojana
(PMJDY) scheme an open-ended scheme and added more incentives.
The Government of India planned to inject Rs. 42,000 crore (US$ 5.99 billion) in public
sector banks by March.

Achievements

Following are the achievements of the Government:

In July 2021, Unified Payments Interface (UPI) recorded 3.25 billion transactions worth Rs.
6.06 lakh crore (US$ 81.48 billion).
According to the RBI, India’s foreign exchange reserves reached US$ 611.14 billion, as of
July 23, 2021.
To improve infrastructure in villages, 204,000 point of sale (PoS) terminals have been
sanctioned from the Financial Inclusion Fund by National Bank for Agriculture & Rural
Development (NABARD).

The number of transactions through immediate payment service (IMPS) reached

303.76 million (by volume) and amounted to Rs. 2.84 trillion (US$ 38.07 billion) in
June 2021.

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 COMPANY PROFILE

Corporate profile:

Axis Bank is the third largest private sector bank in India. The Bank offers the entire spectrum
of financial services to customer segments covering Large and Mid-Corporates, MSME,
Agriculture and Retail Businesses.

The Bank has a large footprint of 4,594 domestic branches (including extension counters)
with 11,333 ATMs & 5,710 cash recyclers spread across the country as on 31st March, 2021.
The Bank has 6 Virtual Centres and has over 1500 Virtual Relationship Managers as on 31st
March 2021.The Overseas operations of the Bank are spread over eight international offices
with branches at Singapore, Dubai (at DIFC) and Gift City-IBU; representative offices at
Dhaka, Dubai, Abu Dhabi, Sharjah and an Overseas subsidiary at London, UK.

Axis Bank is one of the first new generation private sector banks to have begun operations in
1994. The Bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of
India (SUUTI) (then known as Unit Trust of India), Life Insurance Corporation of India
(LIC), General Insurance Corporation of India (GIC), National Insurance Company Ltd., The
New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India
Insurance Company Ltd. The share holding of Unit Trust of India was subsequently
transferred to SUUTI, an entity established in 2003.

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 With a balance sheet size of Rs. 9,96,118 crores as on 31st March 2021, Axis Bank has
achieved consistent growth and with a 5 year CAGR (2015-16 to 2020-21) of 13% each in
Total Assets & Advances and 15% in Deposits.

Vision and Mission

To be the preferred financial solutions provider excelling in customer delivery

through insight, empowered employees and smart use of technology
Core Values
• Customer Centricity
• Ethics
• Transparency
• Teamwork
• Ownership

Media center
Axis Bank is the third largest private sector bank in India. The Bank offers the entire spectrum
of financial services to customer segments covering Large and Mid-Corporates, MSME,
Agriculture and Retail Businesses.
The Bank has a large footprint of 4,594 domestic branches (including extension counters)
with 11,333 ATMs & 5,710 cash recyclers spread across the country as on 31st March, 2021.
The Bank has 6 Virtual Centres and has over 1500 Virtual Relationship Managers as on 31st
March 2021.The Overseas operations of the Bank are spread over eight international offices
with branches at Singapore, Dubai (at DIFC) and Gift City-IBU; representative offices at
Dhaka, Dubai, Abu Dhabi, Sharjah and an Overseas subsidiary at London, UK. The
international offices focus on Corporate Lending, Trade Finance, Syndication, Investment
Banking and LiabilityBusinesses.
Axis Bank is one of the first new generation private sector banks to have begun operations in
1994. The Bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of
India (SUUTI) (then known as Unit Trust of India), Life Insurance Corporation of India
(LIC), General Insurance Corporation of India (GIC), National Insurance Company Ltd., The
New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India
Insurance Company Ltd. The share holding of Unit Trust of India was subsequently
transferred to SUUTI, an entity established in 2003.
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 With a balance sheet size of Rs. 9,96,118 crores as on 31st March 2021, Axis Bank has
achieved consistent growth and with a 5 year CAGR (2015-16 to 2020-21) of 13% each in
Total Assets & Advances and 15% in Deposits.

Promoters:
Axis Bank is one of the first new generation private sector banks to have
begun operations in 1994. The Bank was promoted in 1993, jointly by Specified Undertaking
of Unit Trust of India (SUUTI) (then known as Unit Trust of India), Life Insurance
Corporation of India (LIC), General Insurance Corporation of India (GIC), National Insurance
Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company
Ltd. and United India Insurance Company Ltd. The shareholding of Unit Trust of India was
subsequently transferred to SUUTI, an entity established in 2003.

Board of Directors:
Rakesh Makhija
Independent Director & Non Executive (Part time) Chairman - Axis Bank
Rakesh Makhija, aged 69 years, is an Independent Director on the Board of Axis Bank
Limited since 27th October 2015. He is also the Non-Executive (Part-time) Chairman of the
Bank since 18th July 2019.

Amitabh Chaudhry,
Managing Director and Chief Executive Officer - Axis Bank
Amitabh Chaudhry, aged 56 years, is the Managing Director & Chief Executive Officer (MD
& CEO) of Axis Bank Limited.

S Vishvanathan
Independent Non-Executive Director - Axis Bank
S. Vishvanathan, 66 years, is an Independent Director of the Bank since 11 th February 2015.
He has done his M.Sc. in Physics and has completed MBA and CAIIB.
He has over 37 years of banking experience with State Bank of India (SBI). He retired as
Managing Director & GE (Associates & Subsidiaries) of SBI. Earlier, he was Dy. Managing
Director (Mid Corporate), SBI.
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 Ketaki Bhagwati
Independent Non-Executive Director - Axis Bank
Ketaki Bhagwati, 57 years, is an Independent Director of the Bank since 19th January 2017.
She is a former Chief Investment Officer in the Financial Institutions Group at the
International Finance Corporation (IFC), the private sector financing arm of the World Bank
Group. She has over twenty four years of experience in private equity, M&A, debt &
structured finance and distressed asset workouts across sectors in several regions including
Asia, the Middle East & Africa.

Stephen Pagliuca
Nominee Director - Axis Bank
Stephen Pagliuca, 66 years, is a Non-Executive (Nominee) Director of the Bank since 19th
December2018.
He received a B.A. from Duke University and an M.B.A. from the Harvard Business School.
He is Co-Chair of Bain Capital, a leading global private investment firm with approximately
$120 billion in assets under management.

Senior Management:

Amitabh Chaudhry
Managing Director and Chief Executive Officer - Axis Bank
Amitabh Chaudhry is currently the Managing Director & Chief Executive Officer of Axis
Bank. Under his leadership, Axis Bank is undergoing a well-outlined multi-year
transformation program, which is expected to catapult the bank to a premier financial
institution of the country.
Rajesh Dahiya
Executive Director (Corporate Centre) - Axis Bank
Rajesh Dahiya is an Engineer with a Masters in Human Resources Management. With over 25
years of experience, he was the Group Executive & Head-Corporate Centre at Axis Bank,
prior to his appointment as an Executive Director (Corporate Centre) of the Bank. In his
earlier role, he supervised all functions under Corporate Centre – Audit, Human Resources,
Compliance, Company Secretary, Corporate Communications, Administration & Security,
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 Corporate Real Estate Services, Chief Business Relations Officer (CBRO), Ethics &
Sustainability and Law. In addition, he was also overseeing the functioning of Axis Bank
Foundation.

Rajiv Anand
Executive Director (Wholesale Banking) - Axis Bank
Rajiv Anand, 55 years, joined the Bank on 1st May 2013 from its asset management arm, Axis
Asset Management Co. Ltd., where he was the founding Managing Director & CEO. Rajiv
Anand is a Commerce graduate and a Chartered Accountant by qualification.

Deepak Maheshwari
Group Executive and Chief Credit Officer - Axis Bank
Deepak Maheshwari is the Group Executive and Chief Credit Officer of the Bank since
January, 2019 and is responsible for credit underwriting, policy and monitoring. He joined
Axis Bank after spending two decades in AXIS Bank where he was Group Head of the
Wholesale Credit function, responsible for asset quality, sanctions, policy and monitoring of
the entire Wholesale credit portfolio of that Bank.

Ganesh Sankaran
Group Executive - Wholesale Banking Coverage Group - Axis Bank
Ganesh Sankaran is the Group Executive - Wholesale Banking Coverage Group at Axis Bank
since March 2019. He has nearly 25 years of experience across coverage, credit and risk
functions and has handled verticals like Corporate Credit, Financial Institutions, Business
Banking, Mortgages, Commercial Transportation, Equipment Finance & Rural Lending.
At Axis Bank he supervises all functions under Strategic Coverage Group, Strategic Initiative
Group, Corporate Client Coverage Group, Mid - Corporate Group, Global Financial
Institution Department, Government Business Group, MNC/New Economy Group and
Commercial Banking Department.

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 CHAPTER – III
RESEARCH METHODOLOGY

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 STATEMENT OF THE PROBLEM

The banking system of India is featured by a large network of banks, serving many kinds of
financial needs of the people .The Axis Bank popularly is one of the leading banks in India with
number of branches and variety of research is completed until it has formulated a specific
problem. The problem of the study is to analyze the financial status . The investigation in this
study is the financial performance of the bank. The study will mainly explore the financial tools
to measure and interpret a performance. The main objective of any company is the creation of
wealth for its stakeholders although this mostly applies market facts. This means that progress
needs to be measured to show the bank return in total by highlighting the major strengths and
opportunities of the bank and on the other hand, weaknesses and threats facing the bank also An
analysis indicates the level of efficiency, liquidity, debt management and adequate cash flow. No
research is completed until it as formulated a specific problem. The problem of study is to
analyze the financial status of axis bank.

NEED OF THE STUDY

This requires free market competition between open banks and private banks. Step by step,
the competitiveness from the finance department still exists. By expanding poor resources
and reducing benefits and benefits, these will affect the applicability of commercial banks.

Business banks have assumed a fundamental job in provide guidance to monetary

improvement by cooking the money related necessity of exchange and National industry.
By giving general population savings, commercial banks have ensured capital
arrangements.
Banks allocate network investment funds to the classification area and then allocate them
according to the needs of experts arranged nationwide, which can be distributed among
unique currency activities.

“Banks are not just the protected store vaults of these reserve funds, they accept the general
financial framework anyway, they also open stores during their lending activities. In any case,
the necessary capabilities of the broker are favorable device arrangements,

OBJECTIVES
 To know the liquidity and solvency position of Axis bank.
 To study the profitability of Axis bank.
 To identify the financial strength and weakness of the Axis bank.
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  To offer suitable suggestion for improving performance of the bank.

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 SCOPE OF THE STUDY

The contemporary survey selects a exclusive branch banks to assess budget execution. The
main scope of the review is part of the investigation of real work engagement. The review of
the applicable ratio survey depends on the annual currency report of the Indian hub bank in
recent years.

RESEARCH METHODOLOGY

In the present enlightening investigation is utilized. An endeavor has been made to gauge,
evaluate and think about the fiscal implementation of the Bank. The investigation apportioned
two side part of partners. the investors riches and other outside partners. The inspection rests
on elective data that has been collected from year on year reports of the bank site, magazines,
diaries, archives and other distributed data. It covers the time of years from year 2013-14 to
year 2017-18. Proportion Analysis was linked to break down and think about the outlines in
banking business and money related accomplishment.

STATISTICAL TOOLS

The Researcher has utilized the accompanying apparatuses to present

examination information.

Data presentation
I. Financial Statements
II. Common size Balance Sheets and P&L accounts. III. Ratio Analysis

PERIOD OF THE STUDY

This investigation of Financial Analysis of AXIS Bank money related examination is
constrained to five years from 2014 up to 2018. the bookkeeping year begins from 1st April
to 31th March.

LIMITATIONS
• The consider depends on the optional information and the restriction of utilizing auxiliary
information may influence the outcomes.
• Data maybe outdated

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 • Auxiliary information comes from Axis Bank's three-year annual report. It is conceivable that
the information presented in the annual report may be a limited time frame and cannot
effectively prove the true difference in bank productivity.
• Much of the money-related surveys look at the bank's development, productivity, and
currency robustness by detecting the data confined in the monetary summary. A currency ratio
survey is conducted by appropriately establishing a link between the five-year balance sheet
and the P&L account to distinguish the bank's currency-related quality and shortcomings. By
examining the financial summaries of the different tools and assessing the linkages between
the different components of the financial report, it helps to better understand the bank's
budget, development and execution.

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 CHAPTER - IV
ANALYSIS AND
INTERPRETATION

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 FI NANCIAL STATEMENTS:
Financial Analysis is summaries of the operating, financing, and investment activities of a
business. Financial Analysis should provide information useful to both investors and creditors
in making credit, investment, and other business decisions. And this usefulness means that
investors and creditors can use this Analysis to predict, compare, and evaluate the amount,
timing, and uncertainty of potential cash flows.

In other words, financial Analysis provide the information needed to assess a company‘s
future earnings and therefore the cash flows expected to result from those earnings. The term
financial statement includes at four basic statements, accompanied by a management
discussion and analysis:
• The balancesheet
The balance sheet is a summary of the assets, liabilities, and equity of a business at a
particular point in time—usually the end of the firm‘s fiscal year. The balance sheet is also
known as the statement of financial condition or the statement of financial position.
• The income statement
An income statement is a summary of the revenues and expenses of a business over a period
of time, usually one month, three months, or one year. This statement is also referred to as the
profit and loss statement. It shows the results of the firm‘s operating and financing decisions
during that time.
The purpose of the income statement is to show managers and investors whether the company
made or lost money during the period being reported. The important thing to remember about
an income statement is that it represents a period of time. This contrasts with the balance
sheet, which represents a single moment in time.

COMPARATIVE FINANCIAL STATEMENT:

Comparative financial statement is a tool of financial analysis that depicts change in each item
of the financial statement in both absolute amount and percentage term, taking the item in
preceding accounting period as base. Comparison and analysis of financial Analysis may be
carried out using the followingtools:

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 • Comparative BalanceSheet:

The comparative balance sheet shows increase and decrease in absolute terms as well as
percentages, in various assets, liabilities and capital. A comparative analysis of balance sheets
of two periods provides information regarding progress of the business firm. The main
purpose of comparative balance sheet is to measure the short- term and long-term solvency
position of the business.

• Comparative IncomeStatement:

Comparative income statement is prepared by taking figures of two or more than two
accounting periods, to enable the analyst to have definite knowledge about the progress of the
business. Comparative income Analysis facilitates the horizontal analysis since each
accounting variable is analyzed horizontally.

Comparative Balance Sheet of AXIS BANK from 2014-2015 to 2018-2019

(Rs. in crores)

PARTICU 2017-2018 2018-2019 2019-2020 2020-2021

LARS
Abso % Abso % Abso % Abso %
lute lute lute lute
chan of chan of chan of chan of
ge cha ge cha ge cha ge cha
nge nge nge nge
Capital a
Capital
Reserves a 1925. 43. 1136 18. 1248 16. 1280 14.
Surplus 14 9 .19 02 .99 78 .33 73
Deposits 1153 18. 1564 21. 1757 19. 1499 14.
5.88 90 5.83 56 6.52 92 9.62 18
Borrowing (752. (58. 426. 80. 1143 119 2772 132
s 46) 64) 58 37 .01 .39 .49
Other 905.5 30. 58.9 1.5 360. 9.1 648. 15.
Liabi 51 7 2 46 7 45 11
lities
and
Provisions
1361 19. 1726 20. 2032 20. 1970 16.
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 Total 4.06 31 7.57 53 8.98 05 0.89 19
Assets:

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 Cash a (221. (3.4 849. 13. (182. (2.5 (559. (8.1
balances w 36) 4) 14 67 78) 9) 07) 3)
Balances w 132.3 38. 580. 122 631. 60. 810. 48.
Call 6 94 24 .87 89 04 12 10

Investment 885.5 4.0 5467 23. 6515 23. 3192 9.1

s 4 .76 98 .43 05 .27 8
Advances 1162 29. 1068 20. 1310 21. 1507 20.
6.57 18 0.85 75 3.78 09 3.69 03
Fixed 1055. 197 (32.1 (2.0 (6.82 (0.4 74.6 4.8
Assets 8 .77 ) 2) ) 4) 9 2

Capital (0.85 (15. 17.4 381 33.3 151 (50.0 (90.

WIP ) 68) 4 .62 .29 4) 47)

Other 136.0 9.4 (295. (17. 234. 18. 1159 76.

Assets 4 4 75) 74) 19 27 .23 45

Total 1361 19. 1726 20. 2032 20. 1970 16.

4.06 31 7.57 53 8.98 05 0.89 19

Interpretation:

 Deposits and Advances are the main liability and asset of a banking company.
Every banking company likes to increase the both items. For the past five years
i.e., 2017- 2021 there is no change in the sharecapital.
 Deposits are increasing at a decreasing rate. During 2017-2018 it increases by
18.90% and in 2018-2019 it increases by 21.56% but thereafter it increases by
19.92% in 2019-2020 and 14.18% in 2020-2021. This represents deposits are
repaid during those years.
 During 2017-2018 borrowings decreases by 58.64%. It means borrowings are
repaid. And thereafter are increases at increasingrate.

 Cash and balances with RBI are decreases during 2020-2021. This is due
to decreases in CRR byRBI.
 Balances with other banks, Money at call are increases during the past fiveyears.
 Advances are increases at a decreasing rate. During 2017-2018 it increases
by 29.18% and 21.09% in 2019-2020 and 20.03% in2020-2021.

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  Investments are the second major asset of the banking company. Investments
are increases at an increasing rate. But during 2020-2021 it increases only by
9.18%.
 Fixed assets are fluctuating due to disposal of assets, depreciation rates
and revaluation of assets.

Comparative Income Statement of AXIS BANK from 2017-2018 to 2020-2021

(Rs. in crores)
PARTIC 2017-2018 2018-2019 2019-2020 2020-2021
ULARS
Abs % Abs % Abs % Abs %
olute of olute of olute olute of
chan chan chan o chan
ge ge ge ge
Income:
Interest 1679 32. 1026 15. 1503 19. 2870 30.
Earned .55 61 .73 03 .97 14 .29 66
Other (32.4 (3. 138. 13. 8.17 0.7 50.2 4.2
Income 5) 04) 28 35 0 7 5
Operating 1647 26. 1165 14. 1512 16. 2920 27.
Income .1 49 .01 81 .14 74 .56 70
Expenditu
re:
Interest 1062 33. 331. 7.8 771. 16. 2488 46.
Expended .74 64 36 5 74 95 .4 73
Operating (321. (18 693. 48. 517. 24. 299. 11.
Expenses 08) .35 56 54 61 39 73 35
)
Total 741. 15. 1024 18. 1289 19. 2788 35.
Expenses 66 11 .92 14 .35 32 .13 01
Operating 905. 69. 140. 6.3 222. 9.4 132. 5.1
Profit 44 13 09 2 79 6 43 4
Provisions 668. 222 (169. (17 63.7 7.9 912. 10.
Contingen 87 .23 59) .49 6 4 56
cies )
Net profit 236. 23. 309. 24. 159. 10. 41.2 2.4
for the 58 45 67 87 08 23 0
Year
Extra 8.30
ord
inary
Items
Profit 3.57 4.4 1.83 2.1 1.82 2.1 0.82 0.9
br 2 7 1 3
ought
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 Forward

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 Total P & 240. 22. 311. 23. 160. 9.8 33.7 1.8
L A/c 15 04 5 43 9 1 2 7

Interpretation:
 For banking company the major income and expenditure are interest income and
interest expenses. The interest incomes are increases by 32.61% in 2017-2018,
19.14% in 2019-2020 and 30.66% during2020-2021.
 The interest expenses are also increases by 7.85% in 2018-2019 and 46.73%
during 2020-2021. This is due to increases inborrowings.
 The net profits for the year are increases at a decreasing rate. This is because of
the increases in expenses than increases inincome.

TREND ANALYSIS:
Trend percentage is very useful in making comparative study of the financial Analysis for a
number of years. These indicate the direction of movement over a long tine and help an
analyst of financial Analysis to form an opinion as to whether favorable or unfavorable
tendencies have developed. This helps in future forecasts of various items. For calculating
trend percentages any year may be taken as the ‘base year’. Each item of base year is assumed
to be equal to 100 and on that basis the percentage of item of each yearcalculated.
Trend Percentage of AXIS BANK Balance Sheet from 2017-2018 to 2020-2021
Trend Percentage (Base year 2014)
PARTICULARS 2017 2018 2019 2020 2021
Capital and liabilities:
Capital 100 100 100 100 100
Reserves and surplus 100 144 170 198 228
Deposits 100 119 145 173 198
Borrowings 100 41 75 164 380
Other Liabilities and Provisions 100 131 133 145 167
Total 100 119 144 173 201
Assets:
Cash and balances with RBI 100 97 110 107 98
Balances with banks, Money at 100 139 310 496 734
call
Investments 100 104 129 159 173
Advances 100 129 156 189 227
Fixed Assets 100 298 292 291 305
Capital WIP 100 84 406 1020 97
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 Other Assets 100 109 89 105 186

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 Total 100 119 144 173 201

Interpretation:
 Deposits increases to Rs.1, 20,803.80 cores in 2021 from Rs.1, 05,804.18
cores in 2020. In 2014, it was only Rs.61, 045.95cores.
 Borrowings decreases in 2018 and thereafter increases at increasingrate.
 Advances and Investments are also increased, in the last fiveyears.
 Fixed assets increase as well as decreases in the last five years. This is due
to change in depreciation rates and revaluation ofassets.
 Finally in 2021, the capital WIP decreases at a greater amount. It is also a
good sign for efficient workmanagement.

TREND PERCENTAGE OF AXIS BANK INCOME STATEMENT FROM 2017-2018 to 2020-2021

Trend Percentage (Base year 2017)

PARTICULARS 2017 2018 2019 2020 2021
Income:
Interest Earned 100 133 153 182 238
Other Income 100 97 110 111 115
Operating Income 100 127 145 170 217
Expenditure:
Interest Expended 100 134 144 169 247
Operating Expenses 100 82 121 151 168
Total Expenses 100 115 136 162 219
Operating Profit 100 169 180 197 207
Provisions & Contingencies 100 322 266 287 317
Net profit for the year 100 124 154 170 174
Extra ordinary items
Profit brought forward 100 104 107 109 110
Total P & L A/c 100 122 151 165 169

Interpretation:
 Interest income as well as other income increases in the last fiveyears.
 Interest Expenses increased from Rs.3159.08 cores in 2014 to Rs.7813.32
cores in 2021.
 The Net profit increased to Rs.1755.27 cores in 2021 compared to the
previous year’s profit.

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 CASH-FLOW STATEMENT:

Cash – flow statement is a statement showing inflows (receipts) and outflows (payments) of
cash during a particular period. In other words, it is a summary of sources and applications of
each during a particular span of time. The cash flow statement includes only inflows and
outflows of cash and cash equivalents; it excludes transactions that do not directly affect cash
receipts and payments. These non-cash transactions include depreciation or write-offs on bad
debts or credit losses to name a few. The cash flow statement is a cash basis report on three
types of financial activities: operating activities, investing activities, and financing activities.
Non-cash activities are usually reported in footnotes.

The cash flow statement is intended to

 provide information on a firm's liquidity and solvency and its ability to

change cash flows in futurecircumstances
 provide additional information for evaluating changes in assets,
liabilities andequity
 improve the comparability of different firms' operating performance
by eliminating the effects of different accountingmethods
 Indicate the amount, timing and probability of future cashflow.

Cash Flow Statement of AXIS BANK

(Rs. In Crores)
PARTICULAR 2017 2018 2019 2020 2021
S
Net Profit Before 1008.7 1245.3 1554.9 1714.0 1746.97
Tax 4 2 9 7
Net Cash 2238.6 382.66 1700.0 (193.0 (1957.1
(used in) 4 3 9) 8)
Operating
Activities
Net Cash (95.28) (99.06) (101.9 (127.5 (144.71)
(used 5) 5)
in)/from
Investing
Activities
Net Cash (188.2 (372.6 (168.7 769.75 2352.94
(used 8) 1) 0)

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 in)/from

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 Financing
Activities
Net 1955.0 (89) 1429.3 449.11 251.05
(decrease)/increa 7 8
se In Cash
and Cash
Equivalents
Opening Cash 4817.7 6772.8 6683.8 8113.2 8562.31
Equivalents 5 2 2 0
Closing Cash 6772.8 6683.8 8113.2 8562.3 8813.36
Equivalents 2 2 0 1

Interpretation:
 It is revealed that the cash flow from operating activities is in negative in
2020 and 2021.
 This is due to increase in Interest Expenses and Extra ordinary loss of
Rs.8.30 crores in 2021.
 The cash flows of the bank are in a good condition. In 2019 the cash flow
from financing activities increased at high level. It is a goodsign.

RATIO ANALYSIS:
Ratio analysis is such a significant technique for financial analysis. It indicates relation of two
mathematical expressions and the relationship between two or more things. Financial ratio is a
ratio of selected values on an enterprise's financial statement. There are many standard ratios
used to evaluate the overall financial condition of a corporation or other organization.
Financial ratios are used by managers within a firm, by current and potential stockholders of a
firm, and by a firm‘s creditor. Financial analysts use financial ratios to compare the strengths
and weaknesses in various companies. Values used in calculating financial ratios are taken
from balance sheet; income statement and the cash flow of company, besides Ratios are
always expressed as a decimal value, such as 0.10, or the equivalent percent value, such
as10%.

Essence of ratio analysis:

Financial ratio analysis helps us to understand how profitable a business is, if it has enough
money to pay debts and we can even tell whether its shareholders could be happy or not.
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 Financial ratios allow for comparisons:
• betweencompanies
• betweenindustries
• between different time periods for onecompany
• between a single company and its industryaverage

Ratio analysis tells us whether the business

• isprofitable?
• Has enough money to pay its bills anddebts?
• Could be paying its employees higher wages, remuneration or soon?
• is able to pay itstaxes?
• Is using its assets efficiently ornot?
• has a gearing problem or everything isfine?
• Is a candidate for being bought by another company orinvestor?

Methodology:
The present study of Banks is based on CAMEL Methodology, which evaluates each and
every component that is of prime importance from the functioning of the Bank's perspective.
The model examines the efficiency of banks among these important parameters like Capital
Adequacy, Asset Quality, Management, Earnings Quality and Liquidity of the AXIS BANK

CAMEL Model:

The CAMEL approach was developed by bank regulators in the United States as a means of
measurement of the financial condition of a financial institution. (Uniform Financial
Institutions Rating System established by the Federal Financial Institutions Examination
Council). RBI too analysis the banks performance through CAMEL methodology
The acronym CAMEL stands for:

• Capital Adequacy
• Asset Quality
• Management
• Earnings(Profitability)

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 CAMEL Analysis requires:

• financial Analysis (the last three years and interim Analysis for the most
recent 12- month period)
• cash flowprojections
• portfolio agingschedules
• fundingsources
• information about the board ofdirectors
• operations/staffing
• Macroeconomicinformation.

Analysis:

• Capital Adequacy

Capital adequacy reflects the overall financial position of a bank and also the ability of the
management to meet the need for additional capital requirement.

• Capital Adequacy Ratio(CAR)

CAR reflects the ability of a bank to deal with probable loan defaults. The RBI guidelines
stipulate banks to maintain a CAR of minimum 9%. It is arrived at by dividing the Tier I and
Tier II capital by risk-weighted assets. Tier I capital includes equity capital and free reserves.
Tier II capital comprises subordinated debt. The stronger will be the bank if the CAR is
higher.

Formula:

CAR=Tier 1 Capital +Tier 2 Capital/ Risk Weighted Assets

TIER 1 CAPITAL -A) Equity Capital, B) Disclosed Reserves

TIER 2 CAPITAL -A) Undisclosed Reserves, B)General Loss reserves, C)Subordinate Term
Debts

Where Risk can either be weighted assets (a) or the respective national regulator's minimum
total capital requirement
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 • Debt-Equity Ratio(D/E)

Debt-Equity Ratio is arrived at by dividing the total borrowings and deposits by shareholders'
net worth, which includes equity capital and reserves and surpluses. The Debt to Equity ratio
is used for measuring solvency, and researching the capital structure of the company. It
indicates how much the company is leveraged (in debt) by comparing what is owed to what
isowned.
Formula:Debt-Equity Ratio=Debt/Equity

In other words it measures the company's ability to borrow and repay money. The debt to
equity ratio is closely watched by creditors and investors, because it reveals the extent to
which company management is willing to fund its operations with debt, rather than equity.

• Advances to Assets(ADV/AST)

This is the ratio of the Total Advances to Total Assets. Total Advances also include
receivables. The value of Total Assets excludes the revaluations of all the assets.
Formula:Advances To Assets=Total Advances/Total Assets*100

TABLE FOR CAPITAL ADEQUACY RATIOS

Ratio 2017 2018 2019 2020 2021

Capital Adequacy Ratio (%) 12.90 13.98 12.71 13.56 13.47
Debt/Equity Ratio 13.37 13.32 13.06 13.40 13.12
Advances To Assets(%) 56.50 61.18 61.30 61.82 63.87

Ratio
1 2 3 4 5

20% 20%

20% 20%

20%

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 Capital Adequacy Ratio (CAR):

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 It is revealed that the, CAR is increased from 12.90% in 2017 to 13.98% in 2018 which seems
to be good. But in 2019 it falls to 12.71%. Again in 2020 it increased to 13.56% and 13.47%
in 2021. The minimum CAR which banks have to maintain is 9% as per RBI's Guidelines.
The bank has maintained CAR above 9%. So, it has better ability to deal with probable
loandefaults.

Debt-Equity Ratio:

The Debt equity ratio is 13.12 in 2021 as compared to 13.40 in 2020. The Debt equity ratio
should be as low as possible. The borrowings of the bank are less than their deposits are
concerned which is a good sign. So, I interpret from the ratio that the bank is better in terms of
debt equity ratio because of lower borrowings and high deposits.

Advances to Asset Ratio:

An advance to Assets ratio is reflects a bank's positions and risk taking ability in lending
funds. A higher Advances/Asset ratio shows that the bank is aggressively lending fund and
vice versa. In the table above, the advances to asset ratio has increased from 61.82% in 2020
to 63.87% in 2021. It is clear that the bank has good risk taking ability.

• Asset Quality

The asset quality is to ascertain the proportion of non-performing assets as a percentage of the
total assets .It also ascertains the NON PERFORMING ASSET movement and the amount
locked up in investments as a percentage of the total assets.

How to calculate non performing assets:

Gross non performing asset - (Balance in Interest Suspense account + DICGC/ECGC claims
received and held pending adjustment + Part payment received and kept in suspense account +
Total provisionsheld).

• Net Non Performing Assets to Total Assets (NNPAs/TA)

It is a measure of the quality of assets in a situation where the management has not provided
for loss on non performing assets.

Formula:Net non performing asset to Total Assets=Net non performing asset/total

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 assets*100

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 • Net Non Performing Assets To Net Advances(NNPA/NA)

Net non performing assets are Gross non performing assets net of provisions on

non performing assets and suspense account.

Formula:Net non performing asset to Net Advances=Net non

performing asset/Net Advances*100

• Percentage change in Net Non Performing Assets

This measure gives the movement in Net non performing assets in relation to Net non
performing assets in the previous year. The higher the reduction in Net non performing asset
levels, the better it is for the bank.

Formula:Percentage Change in non performing asset=Change in Net non performing

asset/Base year’s Net non performing asset *100

TABLE FOR ASSET QUALITY RATIOS

Ratio 2017 2018 2019 2020 2021

Net Non Performing 0.14 0.11 0.14 0.33 0.85
Assets to Total
Assets(%)
Net Non Performing 0.24 0.18 0.23 0.53 1.33
Assets to Net
Advances(%)
Percentage Change in N (4.44) (3.87) 54.50 173.10 201.44
Performing Assets(%)

Asset Quality: An non performing asset (Non Performing Assets) is an asset, including a
leased asset, becomes non-performing when it ceases to generate income from the bank. The
Net non performing assets to Total Assets ratio indicates us how much Non Performing
Assets the bank has to their Total Assets in balance sheet. It is believed that lower the better
for the banks in the case of Asset Quality Ratios.

Net Non Performing Assets to Total Assets:

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 Ratio
12345

20% 20%

20% 20%

20%

The Net non performing asset to total assets has increased from 0.14% in 2019 to 0.33%
in 2020 and 0.85% in 2021 which is not a good indication for the bank.

Net Non Performing Assets to Net Advances:

The Net non performing asset to Net Advances is increased from 0.53% to 1.33 in 2020
and 2021 respectively which is not good for the bank.

Ratio
12345

20% 20%

20% 20%

20%

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 Percentage Change in Net Non Performing Assets:

The Percentage change in Net non performing assets is increased from 54.50 in 2019 to
173.10 in 2020 and 201.44 in 2021. It is not good sign for the bank.

• Management Efficiency

Refers to the efficiency of the Management in managing the bank, in all the ratios higher the
better:

• Total Advances to Total Deposits(TA/TD)

This ratio measures the efficiency of the management in converting the deposits available
with the bank (excluding other funds like equity capital, etc.) into advances.

Formula:Total Advances to Total Deposits=Total Advances/Total Deposits*100

• Profit per Employee(PPE)

This measures the efficiency of the employee. It is arrived at by dividing the net profit of the
bank by total number of employees. Higher the ratio means higher the efficiency of the
management.

Formula:Profit Per Employee=Net Profit/Total number of employees

• Return on Net Worth(RONW)

It is a measure of the profitability of a bank. The amount of net income returned as a

percentage of shareholders equity. Return on equity measures a corporation's profitability by
revealing how much profit a company generates with the money shareholders have invested.

ROE is expressed as a percentage and calculated as:

Return on Equity = Net Income/Shareholder's Equity*100

Net income is for the full fiscal year (before dividends paid to common stock holders but after
dividends to preferred stock). Shareholder's equity does not include preferred shares. It is also
known as "Return on net worth" (RONW).

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 Interpretation:

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 TABLE FOR MANAGEMENT EFFICIENCY RATIOS

Ratio 2017 2018 2019 2020 2021

Total Advances to Total 65.26 70.91 70.44 71.12 74.77
Deposits(%)
Profit Per Employee(Rs. 4.91 6.23 7.92 8.88 9.30
In Crores)
Return on Net worth(%) 24.51 23.35 23.74 21.50 18.73

2500

2000
Ratio

1500 Total Advances to Total

Deposits(%)
Profit Per Employee(Rs. In Crores)
1000 Return on Net worth(%)

500

0
1 2 3 4 5

Total Advances to Total Deposits:

I observed that Bank is better able to convert its Advances to Deposits. Because the ratio is
increased from 71.12% to 74.77% in 2020 and 2019 respectively If it will be increased more,
than it may be risky for bank

Profit per Employee:

Profit per employee of the bank has increased from 8.88 crores in 2018 to 9.30 crores in 2021.
It means the efficiency of the employees is good.

Return on Net Worth:

Return on net worth is reduced from 23.74% to 21.50% and to 18.73% in 2019, 2020, 2021
respectively. It shows there is a reduction in profit.

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 • Earnings Efficiency:
Much of a bank's income is earned through non-core activities like
investments, treasuryoperations, and corporate advisory services and so on.
• Percentage Growth in Net Profit
It is the percentage change in net profit over the previous year.
Formula:Percentage Growth in Net profit=Change in Net profit/Base year’s Net profit
*100
• Net Interest Margin (NIM)
Net Interest Margin (NIM) is defined as the difference between interest earned and
interest expended as a proportion of average total assets. Interest income includes
dividend income. Interest expended includes interest paid on deposits, loans from RBI,
and other short-term andlong-term loans.
Formula:Net Interest Margin=(Interest earned-Interest expended)/Average
of Totalassets*100

• Non-interest Income/Working Funds(NII/WF)

This measures the income from operations other than lending as a percentage of
working funds.
Working funds:
These are total resources (total liabilities or total assets) of a bank as on a particular
date. Totalresources include capital, reserves and surplus, deposits, borrowings, other
liabilities and provision. A high AWF (Avg. Working Fund) shows a bank's total
resources strength.

There is a school of theory which maintains that working funds are equal to
aggregatedeposits plus borrowing. However, more pragmatic view in consonance with
capital adequacy calculations is, to include all resources and not just deposits and
borrowings.
Formula:Non Interest Income/Working funds=Non interest income/Working funds*100

TABLE FOR EARNINGS EFFICIENCY RATIOS

Ratio 2017 2018 2019 2020 2021

Percentage Growth in Net 32.77 23.45 24.87 10.2 1.9
profit(%)
Net Interest Margin(%) 3.45 3.54 3.55 3.75 3.43
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 Non Interest/Working 1.74 1.35 1.26 1.05 0.92
Funds(%)

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 Chart Title
2500

2000
Ratio
1500
Percentage Growth in Net profit(%) Net Inte
Non Interest/Working Funds(%)
1000

500

0
1 2 3 4 5

Percentage Growth in Net Profit:

The bank's earnings quality reflects its profitability and sustainability of the same. I conclude
that the Earning Efficiency of the AXIS BANK is poor. The Percentage growth in net profit
has reduced from 10.2% to 1.9% in 2020 and 2021 respectively.

Net Interest Margin:

Net Interest Margin (NIM) is basically Interest Earned minus Interest Expended on the
proportion of Total Assets. The NIM (%) of the company has reduced from 3.75% to 3.43%
in 2020 and 2021 respectively. It is clear that the interest earned by these banks is reduced or
the interest expended on deposits and borrowings has increased due to this the NIM (%) has
reduced.

Non-interest Income/Working Funds:

The non interest income is the income which is earned by the bank other than lending (core)
activity. The Non interest income/working fund (%) ratio measures the income from
operations other than lending as a percentage of working funds. It is observed that bank’s Non
Interest Income/Working Fund (%) is reduced from 1.05% in 2020 to 0.92% in 2021 This is
mainly because AXIS BANK is not concentrating on other banking activities like Merchant
Banking, Investment Banking, Private Equity, and Underwriter.

• Liquidity:
• Liquid Assets/Demand Deposits (LA/DD)

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 This account allows you to "demand" your money at any time, unlike a term deposit, which
cannot be accessed for a predetermined period (the loan's term). This ratio measures the

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 ability of a bank to meet the demand from demand deposits in a particular year. Higher ratio is
better for banks. A demand deposit or bank money refers to the funds held in demand
deposit accounts in commercial banks. These account balances are usually considered money
and form the greater part of the money supply of a country.
Formula:
Liquid Assets to Demand Deposits=Liquid Assets/Demand Deposits*100
• Liquid Assets/Total Assets(LA/TA)
Liquid Assets include cash in hand, balance with RBI, balance with other banks (both in India
and abroad), and money at call and short notice. The ratio is arrived by dividing liquid assets
by total assets. Higher the ratio better it is.

Formula:
Liquid Assets to Total Assets=Liquid Assets/Total Assets*100

TABLE FOR LIQUIDITY RATIOS

Ratio 2017 2018 2019 2020 2021

Liquid 143.04 126.29 122.47 132.96 126.52
Assets/Demand
Deposits(%)
Liquid Assets/Total 9.61 7.95 8 7.03 6.23
Assets(%)

4 Liquid Assets/Total Assets(%)

3 Liquid Assets/Demand
Deposits(%)
2 Ratio

0 500 1000 1500 2000 2500

Liquidity is the ability of the bank to meet its financial obligations. A high liquidity ratio

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 indicates a bank's comfort level vis-à-vis its ability to manage its obligations, both short-term

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 as well as long-term. Liquidity of a bank can be measured using metrics such as Liquid Assets
(LA) to Demand Deposits (DD) and LA to Total Assets (TA).

Liquid Assets/Demand Deposits:

In Demand Deposit basically the customer can withdraw the money without any prior notice
to depository, it is exactly opposite of term deposit where customer has to give proper notice,
and follow the procedure to break the term deposit. It is revealed that the liquid assets to
demand deposits (%) of the bank have reduced from 132.96% to 126.52% in 2018 and 2019
respectively. So, I conclude AXIS BANK is able to maintain its liquid assets are to demand
deposits in greater percentage.

Liquid Assets/Total Assets:

The bank has maintained lower liquid assets to total assets in the past five years. It is observed
that the bank’s ratio is decreasing from 7.03% to 6.23% in 2018 and 2019 respectively.

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 CHAPTER -
V FINDINGS

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 Comparative Statement:
• There are five types of liabilities in a bank. Among that, the most important
liabilities are Deposits and Borrowings. The growth rate of deposits portfolio is
decreasing. During 2014-09, it has increased by 18.90%, and in 2015-10 it
increased by 21.56% but in 2018-12 it increased by only 14.18%. Here the
growth should be compared to overall banking sector. (This is because the
deposits are repaid and increase in new customers arelow.)
• The borrowings are increases at increasing rate. In 2014-09 it decreases by
58.64%. It means the borrowings are repaid. But in 2018-12, it increases
by132%.
• The most important and major assets for a bank, are advances and investments.
It is observed that the advances are increased at a marginal level. Investments

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 are increased significantly. But in 2018-12 it increases by 9.18% only. Here
compare the growth rate with overall IndustrialProduction.
• The major income and expenses in a bank is interest earned and interest
expenses. Both the interest earnings and interest expenses are fluctuating. But
the interest expenses is increased significantly. This is because of increased
inborrowings.
• Only in 2018-12 there was a extraordinary loss of Rs.8.30 crores. This is
because of fluctuations in the rate of foreigncurrencies.

Trend Analysis:

• The deposits are increased marginally. But the borrowings are increased tremendously.
• Both Advances and investments are increasedmarginally.
• The interest earned are increased marginally. But the interest expenses are increased
at tremendously. So, the net profit increasesslowly.

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 SUGGESTIONS AND RECOMMENDATIONS

Some of the recommendation and suggestion are as follows:

• The Reserve Bank of India issued prudential norms for banking companies. According to that
more non performing assets may leads to bankruptcy. Hence, the bank tries to reduce its non
performing assets to aextent.
• The prime motive of any type of business is to earn profits. For banking company, rendering
financial services and earning profits are the primary objectives. As a nationalized bank, it
also has the same objectives. The growth rate of profits is decreasing. So, the bank tries to
improve its profits. For that the bank needs to concentrate on both core and non core
bankingactivities.

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 • The major income for any financial institution is interest income. A banking company will get
more interest income only when it lends money for the productive purposes. Advances are the
major assets of a banking company. The bank tries to increase the advances because it is the
core business of a bank. Increase in advances pays a way to increase in interest income which
automatically increases the profits of thebank.
• Every company must try to control their borrowings. Because more borrowings leads to
increase their interest expenses which reduces their profits. At the same time, low borrowings
are also not good for the company. Here, the borrowings are increasing to an extent. So, the
bank shall try to reduce the borrowings which automatically reduce the interest expenses to a
certainextent.
• Deposits are of two types. One is term deposits and the other is demand deposits. The
important source of funds for bank is deposits. More deposits means the bank are attracting
the customers. The bank provides advances against his/her deposits to the needy person. This
provides the bank to get interest income as well as safety for its funds. So, the bank needs to
increase itsdeposits.

• The bank has to focus on work than the work achieved. It means the bank has to work to
attract the new customers and rendering all types of financialservices.
• As compared to its competitors, the bank has low number of branches and ATMs. It is a major
disadvantage to the bank. Due to low number of branches and ATM, both the customers and
bank may feel uncomfortable to contact and render services. So, the bank has to increase its
number of branches andATMs.

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 CONCLUSION

The balance-sheet along with the income statement is an important tool for investors and
many other parties who are interested in it to gain insight into a company and its operation.
The balance sheet is a snapshot at a single point of time of the company’s accounts- covering
its assets, liabilities and shareholder’s equity. The purpose of the balance-sheet is to give users
an idea of the company’s financial position along with displaying what the company owns and
owes. It is important that all investors know how to use, analyze and read balance- sheet.
Profit & Loss account tells the net profit and net loss of a company and its appropriation.

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 In the case of AXIS BANK , during fiscal 2019, the bank continued to grow and diversify its
assets base and revenue streams. Bank supports agriculture sector more by giving loans under
various schemes.

The comparative statement of profit & loss account shows the increases and decreases in the
items of profit & loss account and balance sheet during 2014 to 2019. It shows that all items
are increased mostly but increase in this year is less than as compared to increase in previous
year except few items.

Trend analysis of profit & loss account and balance sheet shows the percentage change in
items of profit & loss account and balance sheet i.e. percentage change during 2014 to 2019. It
shows that all items are increased mostly but increase in this year is less than as compared to
increase in previous year except few items. In profit & loss account, all items like interest
income, non-interest income, interest expenses, operating expenses, operating profit, net profit
is increased but in mostly cases it is less than from previous year but in some items like
interest income, interest expenses percentage increase is more. Some items like tax,
depreciation is decreased. Similarly in balance sheet all items like advances, cash, liabilities,
deposits, and borrowings are increased. Percentage increase in some item is more than
previous year and in some items it isless.

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 BIBLIOGRAPHY

Books Referred:

• Accountancy. R.K. Mittal,A.K.Jain.

• Financial Management- Theory and Practice. Shashi.K.Gupta, R.K.Sharma.
• P.N. VARSHNEY “Banking Law And Practices” Sultan Chand &Sons
• SUNDRAM & VARSHNEY “Banking, Theory Law And Practices”
Sultan Chand & Sons
• DR. S. N. MAHESHWARI “Principles Of Accounting” Sultan Chand &Sons
• Advanced Accounting, revised edition june 2017-ICAI

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 Internet websites:

• www.AXISbank.com
• www.moneycontrol.com
• www.money.rediff.com
• www.wikipedia.org
• www.google.com
• www.scribd.com
• www.managementparadise.com
• www.rbi.org.in

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