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INTRODUCTION

Co-operative banks are an important constituent of the Indian financial

system. The Co-operative movement originated in the west, but the importance

that such banks have assumed in India is rarely paralleled in the world. Their role

in rural financing continues to be important even today, and their business in the

urban areas also has increased in recent years mainly due to the sharp increase in

the number of co-operative banks.

A Co-operative is voluntary association of members of self-help, catering to

the financial on a mutual basis. In India, the co-operative credit movement started

with the chief object of catering to the banking and credit requirements of the urban

middle class e.g. the small trader or workers, the salaried people with limited fixed

income in urban or semi-urban areas.

The co-operative banking system in India is federal in structure. Structure of

co-operative banking system is three-tier structure in India.

1. Primary Credit Structure (PCS's)

2. Central Co-operative Banks (CCB's)

3. State Co-opeative Banks (SCB's)

Co-operative banking can divided mainly two types Agricultural sector and

Non-Agriculture sector.

The DCCB's (District Central Co-operative Banks) have come into existence

due to the failure of primary societies to attract required resources in the form of

deposits from well to do sections of the village community on one hand and to

inspire the habit of thrift and savings among their members to provide strong base

on the purpose to give support to farmers and small industries. The objectives of

DCCB's.

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Their democratic organization and management help in catering better to the

local needs, mobilization of resources and recovery of the loan advanced.

They are best suited to guide, supervise and control their societies.

They constitute the basic unit of planning and development of co-operative

active at the district level.

In the view of importance of central co-operative banks, the study in

undertaken to assess the performance of Warangal District Co-operative Central

Bank.

Need for Study :

To examine various techniques of Financial Analysis, help in making . For

this different methods are used in the study.

1. Comparative Balance Sheet.

2. Ratio Analysis

3. Trend Analysis

The main aim behind the study is to gains practical experience and practical

experience and knowledge.

Objectives of the Study :

1. To know the financial status of the WDCCB

2. To extract the liquidity position of the WDCCB

3. To find long-term Financial position of the WDCCB

4. To offer conclusions and suitable suggestions.

Period of the Study :

The period of the study is confined to five years that is from 2005-2006 to

2009-2010 as that period of study is considerably long and enough to comprise all

the changes in the WDCCB, They might be economic and cynical.

Limitations of the Study :


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1. It is based on only on monetary information and non-monetary factors

are ignored.

2. It is only study of interim reports of the concern.

3. it does not consider changes in price level.

4. Some changes in accounts procedure by concern may often make

financial analysis misleading.

5. The period of study is limited only for five years that is 2005-2006 to

2009-2010.

CHAPTER PLAN :

Chapter – 1 : Deals with the synopsis and rational study, objectives, data

and methodology of the study, period of the study and limitations of the study.

Chapter – 2 : Deals with introduction about the Co-operative Banks and their

origin and growth in India.

Chapter – 3 : Deals with the profile of the Warangal District Central Co-operative

Bank and its progress.

Chapter – 4 : Deals with the introduction of Financial Statement Technique and

over view, Definition and the scope, types of Financial analysis and procedure of

statement analysis, methods of financial analysis.

Chapter – 5 : Deals with the financial analysis of comparative balance sheet, Ratio

analysis and Trend analysis.

Chapter – 6 : Deals with the conclusions and suggestions.

Co-operative Banks :
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Co-operative banks are an important constituent of the Indian financial

system, judging by the role assigned to the. The co-operative movement originated

in the west, but importance which such banks have assumed in India is rarely

paralleled anywhere else in the world. Their role in rural financing continues to be

important even today, and their Business in the urban areas also has increased in

resent years mainly due to the sharp increase in the number of primary co-

operative banks.

A credit co-operative is voluntary association of members for self-help,

catering to the financial on a mutual basis. In India, the co-operative credit

movement started with the chief object of catering to the banking and credit

requirements of the urban middle class e.g. the small trader or businessman, the

artisans, or factory worker, the salaried people with limited fixed income in urban or

semi-urban areas.

Besides protecting the middle classes and men of modest means from the

clutches of the money lenders, the movement is also expected to indicate the habit

of thrift and savings amongst the people.

Origin and development :

The urban co-operative credit movement originated in Germany when

Herman Schultz started such societies for the benefit of artisans in the cities. In

Italy, the credit of starting such societies goes to Livgi Luzzatti. Encouraged by the

success of the urban credit institutions in these countries. Social workers in India

began to think in terms as the co-operative as a means of bringing success to

middle classes as early as to close of the 19th Century. In India the first credit

society was set up in 1889 at Baroda. But no proper attention was paid for its

development. The government of India showed the golden seed of the co-

operative banking in India in 1904 with introduction of co-operative societies act of


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1904. In rural areas as far as agricultural and related activities ware concerned, the

supply of credit, particularly, institution credit was woefully in adequate and

unorganized money marked agencies, such as money lenders, were providing

credit often at exploitatively high rates of interest. The co-operative banks were

conceived in order to substitute such agencies, provide adequate short term and

long-term institutional credit at reasonable rates of interest and to bring about

integration of the unorganized and organized segments of the Indian money

market.

Urban co-operative credit societies and bank occupy a prominent place

among the agencies supplying credit needs of the people residing in the urban

areas. They advance loans mostly to the traders, artisans and salary earners on

personal security as well as against gold and silver. The urban banks cater

primarily to the needs of the lower and middle-income structure of our society.

Structure of Co-operative Banking System in India :

The Co-operative banking system in India is federal in structure. It has a

pyramid type of a three-ties structure constituted by :

1. Primary Credit Structure (PCS's)

2. Central Co-operative Banks (CCB's)

3. State Co-operative Banks (SCB's)

Co-operative banking can be divided into mainly two types agricultural sector

and non-agricultural sector. Agricultural sector concerned to mainly rural credit. But

non-agricultural sector is totally banks, industrial co-operative banks and

employees co-operative different one; it includes urban co-operative society.

Structure of Co-operative Banks

Co-operative Bank
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RBI

NABARD

SCBS SLDBs UCBs

CCBs CLDBs

PACs

PLDBs Branches of SLDBs

SCBs = State Co-operative Banks

SLDBs = State Land Development Banks

UCBs = Urban Co-operative Banks or Primary Co-operative Banks

CCBs = Central Co-operative Bank

CLDBs = Central Land Development Bank

PACs = Primary Agricultural Credit Societies

PLDBs = Primary Land Development Banks.

2.2 Urban Co-operative Banks :

Co-operative credit societies established in urban areas and referred to as

urban co-operative banks. In most states, however, no clear-cut definition of an

urban co-operative bank is statutorily followed.

Urban co-operative banks usually meet the needs of specific types or groups

of members pertaining to a certain trade, profession, community or even locality.


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Urban banks almost function like commercial banks in providing essential banking

and non-banking agency and utility services.

UCBs are also called as Primary Co-operative Banks (PCBs) by the Reserve

Bank. The RBI defines PCB's as small-sized co-operatively organized banking

units which operate in metropolitan, urban and semi-urban centers to cater mainly

to needs of small borrowers, viz., owners of small scale industrial units, retail

traders, professionals and salaried classes.

The RBI is the licensing authority for new banks a Act, Co-operative banks

are subject to CRR and liquidity requirements at the level of 3% and 25%

respectively at present, they have been advised to lend 60% of their total advances

to the priority sectors.

Role of Urban Co-operative Banks :

Urban Co-operative Banks have an important role to play in several respects

and some of them are listed below :

First and foremost, they can organize and bring together middle and working

classes kin urban and semi-urban areas and inculcate in them the habits of thrift

and self-help and acquaint them with the elements of ordinary banking principles.

The mobilization of savings by urban co-operative banks and the

consequent drawing of urban resources into the apex and central co-operative

banks which are in need of funds to finance the rural, industrial and other functional

co-operatives can contribute to general economic development.

By providing credit on reasonable terms to the middle classes they can

rescue them from the exploitation of money lenders and others unscrupulous

agencies, which is particularly important in the context of rising price and by

financing individual industrialist and artisans working in urban area, they can cost.

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This has a consequently effect also on non-operative lending; ;make a significant

contribution to industrial development.

They can make certain essential banking facilities such as remittance of

funds etc; available in areas which ;may not be considered suitable for commercial

banking and to persons who may not be able to get such civilities from commercial

banks; and they can provide intelligent, experienced and active leadership to the

cooperative movement including the central and apex cooperative banks, which in

view of their federal character draw their directors from member's institutions.

In the view of the importance of central cooperative banks, the study is

undertaken to assess the performance of Warangal district cooperative central

bank.

2.3 Origin and Growth of District Co-operative Central Banks in India:

The DCCBs have come into existence due to the failure of Primary Societies

to attract required resources in the form of deposits from well to do sections of the

village community on one hand and to inspire the habit of thrift and savings among

their members to provide strong capital base on the other. The Co-operatives

Societies act.

1904 was amended kin 1912 incorporating a clause for the registration of

Central Co-operative Societies consequently the number of Central Co-operative

Societies have been registered under provisions of amended Act and have

occupied a position of cardinal importance in the operative credit structure.

Objectives of establishing District Central Co-operative Banks as follows:-

a) Their democratic organization and management help in catering better

to the local needs, Mobilization of resources and recovery of the loans

advanced.

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b) They serve as a cushion in absorbing a part of the over dues of

societies.

c) They are best suited to guide, supervise and control the societies.

d) They constitute the basic unit of planning and development of

cooperative active at the District Level.

2.2 Progress of DCCBs In Andhra Pradesh :

Andhra Pradesh State was formed in the year 1956. The jurisdiction of the

state is \spread over an area of 2.76 lakhs square kilometers and divided into 23

districts comprising three regions of Coastal Andhra, Rayalaseema and Telangana.

Like the other states in Andhra Pradesh the cooperative movement made it's

beginning as early as in k1920. Till the formation of the state there was separate

Provincial cooperative act for Andhra region and Telangana region.

ORGANISATION PROFILE

INTRODUCTION :

The Warangal Co-operative Central Bank Ltd. Warangal No. 20976 is

deemed to have been registered as a co-operative society under the area of

Andhra Pradesh Co-operative Societies Act of 1964. The area of operation of the

bank is confined to entire Warangal District comprising 51 Revenue Mandals out of


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which 21 Mandal Head quarters is covered with the Bank's branches. The Bank is

having 23 Branches including Central office branch covering financed by the

Warangal District Central Co-operative Bank.

OBJECTIVES

Its objectives shall be :

• Primarily to finance the Primary Agricultural Credit Societies k(PACs)

registered or deemed to have been registered under the AP Co-operative

Societies Act 7 of 1964 and secondarily to finance all other Co-operative

Societies in the District To service members of erstwhile PADBs including

disbursement of second and subsequent installments of loans directly to

such members, and recovery of such loan of members till they are

cleared and arrange for issue of fresh long term loans through PACs.

• To finance individuals, firms companies corporations etc; by admitting

them as 'B' class members for purposes approved by higher financing

agencies from time to time either individually or jointly with other

financing institutions.

• To raise funds by way of posit, loans cash credits, overdraft and

advances from Apex Bank, Government and other financing agencies.

• To open regional offices, branches or sub-offices with the prior

permission of the Registrar both for banking purposes and issue and

recovery of ST, MT and LT loans To guarantee the loans and advances

to be made to the member societies by and other agencies.

• To advice develop assist and co-ordinate and supervise and inspect the

functioning of the.

• PACs and also to assist and supervise the functioning of other affiliated

and indebted societies.


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• To buy, sell or deal with securities, debentures or bonds or scrip or other

forms or securities on its behalf or on behalf of members or other

cooperative institutions.

• To maintain a library of Co-operative and banking literature.

• To act on agent of Government or Apex Bank or any institution if

financing loans for

• Agricultural and Rural Development and allied activities and to accept

and administer

• Any fund for such purposes.

• To carry on the general business of banking not repugnant to the

provisions of the AP cooperative societies act 7 of 1964 and the rules

framed there under or the Banking regulations act 1949 as applicable to

cooperative societies and the rules made there under.

All such other things and acts as are necessary, conductive and incidental to

the attainment of the foregoing and generally to promote the cause of cooperation

in the district.

MANAGEMENT OF THE BANK :

The management of the Bank shall vest in a Board consisting of such

number of members and with such composition of members as prescribed in the

A.P.C.S. Act and Rules at present the Board consists of 19 members.

ACCOUNTS AND RECORDS :

Accounts to By-law 55-A of APCs, Act :

"The chief executive officer of every bank by whatever name designation he

is called, or the President of the bank, shall be bound to keep, maintain or cause to
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Maintain such accounts and books relating to that bank in such manner as may be

prescribed. He shall be responsible for corrects and up-to-date maintenance of

such accounts and books, for producing or causing production of the same when

called for in connection to audit, inquiry or inspection".

The Warangal District Co-operative Central Bank Ltd., maintains books of

accounts and records in form prescribed by the registrar and RBI addition as Board

of Directors find it necessary.

The Registrar may prescribe such other statements as from time to time.

The statements shall be made as on 30th June of every year and copy of each shall

be sent to the Registrar within 30 days after close of the Co-operative year ending

30th June.

DEPOSITS :

Deposits may be received at any time within the limits determined under the

PACs. Act and rules on such rate of interest on deposits are subject to rules and

regulations fixed by Board of Directors and also to directive issued by Reserve

Bank of India on behalf from time to time.

THE VARIOUS DEPOSITS RECEIVED BY THE BANK :

• Dhana Laxmi deposits

• Fixed deposits

• Current deposits

• Saving deposits

• Swayam Upadi deposits (day deposits)

• Thrift deposits

• Recurring deposits

• Security deposits

LOANS AND ADVANCES :


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The loans and advances may be granted to members on security subject to

the direction issued by Reserve Bank of India from time and securities approved by

Board of Directors, the securities such as:

i) Personal security and/sureties of other members/members;

ii) Collateral security of movable land immovable property

iii) Gold or silver ornaments or consumer durable;

iv) Industrial mercantile, Agricultural and other marketable commodities or

machinery

v) Under pledge, hypothecation or charge of the society;

vi) Any other tangible security To take legal action against members of

societies in case of failure of the Managing Committee of Societies to

take legal action.

vii) To institute, conduct defend compound, compromise or abandon legal

proceedings by or against the Bank.

viii) To sanction loans to employees as per loaning policy to be determined

and with prior approval of Registrar

ix) To purchase vehicles for the see of the bank as per special by –laws

governing their purchase and maintenance of such vehicles as approved

by Registrar.

x) To transact all other business incident to the administration of the Bank.

THE DIFFERENT TYPES OF LOANS ADVANCED TO MEMBERS :

i) Agricultural Loans

ii) Loans on Deposits

iii) Festival Loans

iv) Vehicle Loans

v) Gold and Jewel Loans


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vi) Loans to owners of Bank

3.4 . ORGANISATION DESIGN (CHART) OF THE WDCCB :

The major functions and their inter-relationships of important structural

aspects of the WDCCB are given in chart. The chart can be considered as vertical

chart as the line of command flows form top to bottom in a vertical line. The chart

is as follows.

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FUNDS AND RETURNS :

FUNDS : The Bank will ordinarily obtain funds from the following sources.

i) Share Capital

ii) Deposits

iii) Other borrowing from various sources

iv) Entrance fee and miscellaneous receipts

v) Grants from Government and other agencies

RETURN : The Bank shall prepare annual returns in such form as may be

prescribed by the

i) Registrar and Apex Bank

ii) Statement showing receipts and disbursements

iii) A profit and Loss account & balance sheet

iv) Which were under the Madras Province and the Nizam government

respectively.

All the societies, which were established prior to the formation of the state,

have come under the fold the Andhra Pradesh Co-operative Societies Act of 1964.

In order to implement the provisions of the Act a separate department is constituted

and Registrar is made in charge for it.

Present Structure of Co-operative in A.P.

Bank in Andhra Pradesh as per 1997

No. of PACs No. of DCCBs No. of SCOB


6695 22 1
State and District Co-operative Banks are providing rural credit through

Primary Agricultural Credit Societies to the 50 lakhs of people. Among them

75% are small and marginal farmers. In A.P. 50% of rural credit is provided by

Co-operative Banks.

FINANCIAL STATEMENT TECHNIQUE


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AN OVERVIEW

Financial Analysis is the basic method of appraising firm's overall study. As

part of a scientific investigation of the firm, it attempts to secure through a

systematic study of some significant clues about its financial condition and

prospects. Its major thrust is future and current facts with a view to projecting and

viability of a concern.

4.1. SCOPE OF THE STUDY:

"Financial Analysis may be defined as the examination and comparison of

financial data of the business with a view to assessing its overall health." It is the

process of inductive reasoning for the purpose of formulating probability beliefs

about a particular firm and information processing system designed to supply firm-

related data for decision-making.

Kennedy and Mc.Muller make the statement, they hold that "the analysis and

the interpretation of financial statement are an attempt to determine the significance

of financial statement data so that forecast may be made of the prospects for future

earning, ability to pay interest and debt maturates (Current and Long-term), and

profitability of a sound dividend policy".

In a slight different connotation, the broad purpose of Financial Analysis

could be said to measurement of solvency and performance in the sense of

profitability, stability and similar items. At its best, financial Analysis seeks to

information from other sources.

4.2 Types of Financial Analysis :

Financial Analysis can be divided in to two following heads. They are as follows:

I) On the basis of material used


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Under this head there are 2 types:

i) Internal Analysis
ii) External Analysis
Internal Analysis :

Persons who have access to the internal accounting records of the business

firm do this analysis.

External Analysis :

Outsiders who do not have access to the detailed information of accounting and

records of the business form do this. The outsider includes investors, creditors,

Government agencies etc.

2) On the basis of modus operandi :

Under this head there are 2 types :

i) Horizontal Analysis

ii) Vertical Analysis

Horizontal Analysis :

It refers to the comparison of financial data of company for several years.

Vertical Analysis :

It refers to the study relationship of the various items in financial statement of one

accounting period.

4.3 PROCEDURE OF FINANCIAL STATAEMTN ANALYSIS

Broadly speaking there are 3 steps in financial analysis.

1) Selection

2) Classification

3) Interpretation

The first step involves selection of information (data relevant to the purpose

of analysis of financial statement. The second step involved is the methodical

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classification of data and the third step includes drawing of inferences and

conclusions.

4.2 METHODS/DEVICES OF FINANCIAL ANALYSIS

The analysis of interpretation of financial statement is used to determine the

financial position and results of operation as well.

The numbers of methods or device used to study are as follows :

1) Comparative Statement

2) Common-Size Statement

3) Ratio Analysis

4) Cash-flow Analysis

5) Fund-flow Analysis

6) Trend Analysis

7) Cost-Volume-Profit Analysis

As the project work deals with the study of the following methods, these

methods devices of financial analysis are discussed as under:

1) Comparative Balance Sheet Statement :

The Comparative Balance Sheet analysis is the study of the trends of same

items, groups of items and computed items in to two or more balance sheet of the

same business on different data. The changes in the periodic Balance sheet items

reflects the conduct of business.

2) Interpretations of Comparative Balance Sheet:

While interpreting Comparative Balance Sheet the interpreter is expected to study.

The following aspects:

1. Current Financial and Liquidity Position

2. Long-term Financial Position and

3. Profitability of the concern.

2) Ratio Analysis :
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(a) Classification of Ratios

In order the ratios serve as tool for financial analysis, they are classified on the

basis of their function or purpose as follows :

(a) Liquidity Ratio

(b) Long-term solvency Ratio and Leverage Ratio

(c) Turnover Ratio

(d) Profitability Ratio

The Ratio Analysis is the one of the next powerful tools financial analysis which

is used to analyze and interpret the financial health of the enterprise. It is with the

help of ratios that the financial statement can be analyzed more clearly and

decision made for such analysis.

Sl. Liquidity Ratio Long-term Solvency Turn over Ratio Profitability Ratio
No. & Leverage Ratio
1. Current Ratio Debit Equity Ratio Fixed Interest Gross Profit
Turnover Ratio
2. Liquid Ratio Debt to total Capital Total Assets Net Profit
Ratio Turn over Ratio
3. Absolute Liquid Interest Coverage Working Operating Profit
Ratio Capital
Turnover Ratio
4. Cash flow / Debit Capital Operating Ratio
Employed
5. Capital gearing Payables Expenses Ratio
Turnover Ratio
6. Debtors Return on Equity
Turnover Ratio
7. Creditors Return on
Turnover Ratio Capital
8. Inventory Return on Total
Turnover Ratio Resources
9. Earning per
Share
10. Price-earning
Ratio
Importance of Ration Analysis :

1. Simplifies changes in financial condition of the Business.

2. It facilities to inter-firm comparison which reveals strong and weak firms.

3. Makes inter-firm comparison of performance of different division of the firms.

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Uses of Ratio Analysis :

1) It helps in decision-making

2) Help in financial forecasting and planning

3) Financial strength and weakness can be easily communicated.

4) Helps in effective control of business form deviations.

5) It is essential part of budgeting control and standard costing.

6) It is helpful in assessing the financial position of the concern.

Where the shareholder or investor is going to invest.

7 Helps in knowing the financial position of the company to extend credit to the

concern for creditors.

8) It helps in knowing the profitability of the concern because fringe benefits are

related to the volume of profits earned.

9) It helps Government, as it is interested to know the overall strength of the

industry to ascertain the economic condition.

Limitations of Ratio Analysis :

(a) Ratios are based only on information that has been recorded in the financial

statement. They suffer from inherent weakness of accounting records such

as historical approach.

(b) Ratios are not only the indicators: they cannot be taken as final decision

regarding good or bad financial position of the business.

(c) Ratios will give misleading results with the effects in price level are not taken

into account.

(d) No fixed standards can be laid down for ideal ratio; it may differ from industry

to industry.

(e) They can be easily window dressed to present better picture of financial and

profitability of outsider.

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(f) Different people intercept ratios in different ways, which leads to bias. As it

is only the means, not and end in it.

COMPARATIVE BALANCE SHEET

Sl.No. LIABILITIES CONTGAINS


1. Deposits Current deposits + fixed deposits + other deposits
2. Interest Payable On Borrowing + On Deposits
3. Borrowings From outside Banks
4. Miscellaneous Cost of Management + Adjusting heads
5. Capital Paid-up share capital
6. Reserves and funds Total of Reserves
Sl.No. ASSETS CONTAINS
1. Cash & Bank Cash balance + Bank balance
balances
2. Investments Deposits with approved banks + short term wings
+ long terms wings + share invested with Co-
operative societies & Institutions
3. Loans & Advances Loans cash credits and over drafts of Co-operative
4. Govt. Securities Dues from Govt.
5. Fixed Assets Premises + Furniture's + Vehicles + Library
6. Interest Receivable Total Interest
7. Other Assets Total of Other Assets
8. Closing stock Trading stock
9. Miscellaneous Miscellaneous income + Adjusting heads
suspense due to + Branch adjustments.
10. Loss Accumulated losses

ANALYSIS

Comparative Balance sheet of the Warangal District Co-operative

Central Bank Ltd., as on 31-3-2005 to 31-3-2006

(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2005 31-3-2006 Inc / Dec %
Amount
ASSETS
CURRENT ASSETS
Cash & Bank balance 653.23 653.23 (-) 41.89 (-) 6.03
Investments 1541.01 2069.66 528.65 34.31
Loans & Advances 17099.97 26697.32 3579.35 21.04
Govt. Securities 127.83 127.83 -- --
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Fixed Assets 38.87 40.17 1.3 3.34
Interest Receivable 2972.06 2770.33 (-)201.73 (-)6.79
Other Assets 349.72 305.54 (-)44.18 (-)12.63
Closing Stock 3.56 2.36 (-)1.2 (-)33.71
Miscellaneous 65.10 183.29 118.19 181.55
Loss 1486.15 2002.92 516.77 34.77
Total Current Assets 24379.39 28852.66 4473.27 18.35

CURRENT LIABILITIES
Deposits 4780.12 6399.92 1619.8 33.89
Interest Payable 1452.48 1815.15 362.67 24.97
Borrowing 14165.42 15727.85 1562.43 11.03
Miscellaneous 266.02 315.91 49.89 18.75
Capital 1719.44 2146.17 426.73 24.82
Reserve & Funds 1995.90 2447.66 451.76 22.63
Total Current Liabilities 24379.39 28852.66 4473.27 18.35

Interpretation

The following Points were observed from the above comparative

Balance Sheet:

1) There has been increased in the loans & Advances Rs. 1403.90 Lakhs i.e.

6.78% and Also an heavy decrease in deposits of the bank in the current year

Rs. (-) 727.64 Lakhs i.e. (-) 11.37%.

2) Cash & Bank balances have shown an decrease in the second year over the

first year, this will grow less liquidity position of the concern.

3) Even though there is a slight increase in the fixed assets but other assets has

decreased, to Res.(-) 51.00 Lakhs i.e.(-) 16.69%

4) The borrowings of the bank are slightly increased by Rs. 1326.09 Lakhs i.e.

8.43%

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5) The Increase in the reserve and funds will mean an increase in Interest

liability where as an increase in capital will not increase any liability for paying

interest.

6) Accumulated loss increased by Rs. 1201.29 Lakhs that is 59.98% over the

previous year.

7) The over all financial position of the bank has slightly increased from the

previous year by Rs. 2552.98 Lakhs that is 8.85%.

Comparative Balance sheet of the Warangal District Co-operative

Central Bank Ltd., as on 31-3-2006 to 31-3-2007

(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2006 31-3-2007 Inc / Dec %
Amount
ASSETS
CURRENT ASSETS
Cash & Bank balance 297.87 228.13 (-)69.74 (-) 23.41
Investments 1774.43 1839.38 64.95 3.66
Loans & Advances 22101.22 22161.33 60.11 0.27
Govt. Securities 127.83 127.83 -- --
Fixed Assets 45.03 51.57 6.54 14.52
Interest Receivable 3370.36 4996.66 1626.30 48.25
Other Assets 254.54 228.75 (-)25.69 (-)10.13
Closing Stock 0.97 0.30 (-)0.67 (-)69.07
Miscellaneous 229.13 230.67 1.54 0.67
Loss 3204.21 5314.28 2110.07 65.85
Total Current Assets 31405.58 35178.90 3773.32 12.01

CURRENT LIABILITIES
Deposits 5672.28 5567.75 (-)104.53 (-)1.84
Interest Payable 2598.32 2996.79 398.47 15.34
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Borrowing 17053.94 16862.64 808.70 4.74
Miscellaneous 244.42 297.48 53.06 21.71
Capital 2158.68 2155.55 (-)3.23 (-)1.50
Reserve & Funds 3677.84 6298.69 2620.85 71.26
Total Current Liabilities 31405.58 35178.90 3773.32 12.01

Interpretation

The following Points were observed from the above comparative

Balance Sheet:

1) An increase in fixed assets should be compared to the increase long term

loans and capital and there is increased in fixed assets by Rs. 6.54 lakhs

that is 14.52% than previous year.

2) The other assets are decreased by Rs. (-) 25.79 lakhs that is (-) 10.13%

from the previous year.

3) The borrowing of the bank are slightly increased by Rs. 808.7 lakhs that is

4.74% than the previous year.

4) The capital structure has decreased by Rs. (-) 3.23 lakhs that is (-) 1.50%

5) The reserves and funds have tremendously increased by Rs. 2620.85 lakhs

that is 71.26%

6) The cash and bank balances has heavily decreased by Rs. (-)69.74 lakhs

that is (-) 23.41% it shows that the bank has a problem with cash.

7) The bank has not doing well in their recoveries it shows that the

accumulated loss has been Increased by Rs. 2110.07 lakhs that is 65.85%

25
8) The current assets and the current liabilities have slightly increased by Rs.

3773.32 lakhs that is 12.01% and the over all financial position of the bank

has been improved satisfactorily.

Comparative Balance sheet of the Warangal District Co-operative

Central Bank Ltd., as on 31-3-2007 to 31-3-2008

(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2007 31-3-2008 Inc / Dec %
Amount
ASSETS
CURRENT ASSETS
Cash & Bank balance 228.13 668.58 440.45 193.07
Investments 1839.38. 1888.47 49.09 2.67
Loans & Advances 22161.33 23701.35 1540.02 6.95
Govt. Securities 127.83 127.83 -- --
Fixed Assets 51.57 19.01 (-)42.56 (-)63.15
Interest Receivable 4996.66 4565.68 (-)430.98 (-)8.63
Other Assets 282.75 177.86 (-)50.89 (-)22.25
Closing Stock 0.30 (-)0.07 (-)0.37 (-)132.33
Miscellaneous 230.67 201.31 (-)29.36 (-)12.73
Loss 5314.28 5183.89 (-)130.39 (-)2.41
Total Current Assets 35178.90 36533.91 1355.01 3.85

CURRENT LIABILITIES
Deposits 5567.75 5858.45 290.70 5.22
Interest Payable 2996.79 3764.78 767.99 25.63
Borrowing 17862.64 17759.19 (-)103.45 (-)0.58
Miscellaneous 297.48 269.02 (-)28.46 (-)9.57
Capital 2155.55 2111.62 (-)43.93 (-)2.04
Reserve & Funds 6298.69 6770.85 472.16 7.50
Total Current Liabilities 35178.90 36533.91 1355.01 3.85

26
Interpretation

The ;following Points were observed from the above Comparative

Balance Sheet:

1) There is a tremendous increase in cash and bank balances, which is Rs.

440.45 lakhs that is 193.07%

2) Deposits of Bank have shown slight increase of Rs. 290.70 lakhs that is

5.22% the loans and advance have increased by Rs. 1540.02 lakhs that is

6.95% this shown that bank is using its resources very properly.

3) Borrowing for the first time have decreased by Rs. (-) 103.45 lakhs that is (-)

0.58% then the previous year showing a decreased liability of the bank.

4) The investment of the bank has slightly increased by Rs. 472.16 lakhs that is

7.50%

5) There is decrease in both fixed assets that other assets.

6) The bank is decreasing the accumulated loss by Rs. (-) 130.39 lakhs that is

2.45% it reveals that the bank is properly using its resources.

7) The capital of the bank has decreased by Rs. (-)43.93 lakhs that is (-) 2.04%

8) The overall financial position of the bank is not bad and has registered

growth in every aspect and the growth of Rs. 1355.01 lakhs that is 3.85.

27
Comparative Balance sheet of the Warangal District Co-operative

Central Bank Ltd., as on 31-3-2008 to 31-3-2009

(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2008 31-3-2009 Inc / Dec %
Amount
ASSETS
CURRENT ASSETS
Cash & Bank balance 668.58 348.98 (-)319.60 (1)47.80
Investments 1888.47 4745.97 2857.50 151.31
Loans & Advances 23701.35 27622.03 3920.68 16.53
Govt. Securities 127.83 127.83 -- --
Fixed Assets 19.01 16.97 (-)2.04 (-)10.73
Interest Receivable 4565.68 3888.84 (-)676.84 (-)14,82
Other Assets 177.86 188.87 11.01 6.19
Closing Stock (-)0.07 (-)1.49 (-)1.56 (-)22.28
Miscellaneous 201.31 56.02 (-)145.29 (-)72.17
Loss 2183.89 43924.11 (-)259.78 (-)5.01
Total Current Assets 36533.91 41918.13 538422 14.74

CURRENT LIABILITIES
Deposits 5858.45 5651.92 (-)206.51 (-)3.52
Interest Payable 3764.78 2666.44 (-)1098.34 (-)29.17
Borrowing 17759.19 21211.81 3452.62 19.44
Miscellaneous 269.02 442.59 173.57 64.52
Capital 2111.62 5115.93 3004.31 142.27
Reserve & Funds 6770.85 6829.42 58.57 0.86
Total Current Liabilities 36533.91 41918.91 5384.22 14.74

Interpretation

The following Points were observed from the above comparative

Balance Sheet:

1) There is no change in the government Securities.

2) Investments also increased by Rs. 2857.5 lakhs that is 151.31% and loans &

advances has been increased by Rs. 39.20.68 lakhs that is 16.54%


28
3) Cash and bank balances has decreased by Rs. (-)319.60 lakhs that is (-)

47.8%.

4) There is a decrease in the fixed assets but the other assets had increased

by Rs. 11.0 lakhs that is 6.19%.

5) The deposits of the bank have been showed a great decrease by Rs. (-)

206.51 lakhs that is (-) 3.52%.

6) The borrowings of the bank are increased by Rs. 2452.62 lakhs that is

19.44% and also the reserve and funds have slightly increased by Rs. 58.57

lakhs that is 0.86%.

7) The capital of the bank has increased by Rs. 3004.31 lakhs that is 142.27%.

8) The reduction in accumulated losses by Rs. (-)259.78 lakhs that is (-) 5.01%

it reveals that the bank using the resources efficiently.

9) The over all financial: position of the bank is good, it has grown by Rs.

5384.22 lakhs that is 14.74%.

COMPARATIVE INCOME STGATEMENT OF WARANGAL

DISTRICT CO-OPERATIVE CENTRL BANK LTD., FOR THE

YEAR ENDING 31st MARCH 2009 TO 2010

(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2009 31-3-2010 Inc / Dec %
Amount
A) INCOME

29
Interest earned 3495.89 3945.19 449.34 12.85
Miscellaneous Receipts 595.27 --- 595.27 0
TOTAL 4091.16 3945.19 1044.57 12.85

B) EXPENDITGURE
Interest paid 2252.94 2692.79 439.85 19.52
Establishment Charges 297.16 255.82 (-)41.34 (-)13.91
Contingent Charges 77.28 50.96 (-)26.32 (-)34,05
Reserve for Depreciation 1,87 6.96 5.09 272.19
Other Reserves Created 860.95 710.37 (-)150.58 (-)17.48
TOTAL 3490.2 3716.9 226.7 226.27
Net Loss before Tax
600.96 228.29 817.87 (-)213.42
(A-B)

INTERPRETATION

The statement shows that the Interest earned is increased by 12.85 and there

miscellaneous receipts are increased not decreased.

1) The contingent charges decreased by (-)26.32% hat is (-) 34.05%.

2) Offer reserve created as decreased by (-)150.58 that is (-)17.48%.

3) The total expenditure as increased by 226.6%.

30
COMPARATIVE INCOME STGATEMENT OF WARANGAL

DISTRICT CO-OPERATIVE CENTRL BANK LTD., FOR THE

YEAR ENDING 31st MARCH 2005 TO 2006

(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2005 31-3-2006 Inc / Dec %
Amount
A) INCOME
Interest earned 1968.88 19.46.70 (-)22.18 (-)1.13
Miscellaneous Receipts 417.96 541.64 123.68 29.59
TOTAL 2386.84 2488.34 101.50 4.25

B) EXPENDITGURE
Interest paid 1689.50 2191.22 501.72 29.70
Establishment Charges 329.45 337.59 8.14 2.47
Contingent Charges 67.93 69.89 1.96 2.88
Reserve for Depreciation 1.62 1.57 (-)0.05 (-)3.09
Other Reserves Created 225.24 404.86 179.52 79.66
TOTAL 2313.84 3005.13 691.29 29.88
Net Loss before Tax
73.00 (-)516.79 (-)589.79 (-)807.93
(A-B)

31
INTERPRETATION

1) The financial performance of the Warangal district Co-operative Central

Bank has recorded a total income of Rs. 2488.34 lakhs as compared to

previous year Rs. 2386.84 lakhs thus registering a growth rate of 4.25%.

2) Net profit decrease from Rs. 73.00 lakhs to (-) 516.79 Lakhs.

3) Interest paid has increased from Rs. 501.72 lakhs that is 29.70% also other

reserve created has increased by Rs. 179.52 lakhs that is 79.66%.

4) The financial position is not satisfactory.

32
COMPARATIVE INCOME STATEMENT OF WARANGAL

DISTRICT CO-OPERATIVE CENTRL BANK LTD., FOR THE

YEAR ENDING 31st MARCH 2006 TO 2007

(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2006 31-3-2007 Inc / Dec %
Amount
A) INCOME
Interest earned 1946.70 2911.88 965.18 49.58
Miscellaneous Receipts 541.64 201.07 (-)340.57 (-)62.88
TOTAL 2488.34 3112.95 624.61 25.10

B) EXPENDITGURE
Interest paid 2191.22 2609.52 418.30 19.10
Establishment Charges 337.59 360.52 22.93 6.79
Contingent Charges 69.89 114.02 44.13 63.14
Reserve for Depreciation 1.57 1.88 0.31 19.74
Other Reserves Created 404.86 1228.30 823.44 203.39
TOTAL 3005.13 4314.24 1309.11 43.56
Net Loss before Tax
(-)516.79 (-)1201.29 (-)684.50 (-)132.45
(A-B)

INTERPRETATION

33
1) The statement shows that both the interest earned and miscellaneous

receipt has declined by 49.58% and (-)62.88% thus the total income has

declined by 25.10%.

2) The Interest paid has increased from Rs. 418.3 lakhs that is 19.10% and

also the contingent charges have increased by Rs. 44.13 lakhs that is

63.14%. Thus the total expenditure has declined by Rs. 1309.11 lakhs that

is 43.56%.

3) The financial position is not satisfactory.

COMPARATIVE INCOME STGATEMENT OF WARANGAL

DISTRICT CO-OPERATIVE CENTRL BANK LTD., FOR THE


34
YEAR ENDING 31st MARCH 2007 TO 2008

(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2007 31-3-2008 Inc / Dec %
Amount
A) INCOME
Interest earned 2911.88 2731.26 (-)180.62 (-)6.20
Miscellaneous Receipts 201.07 313.16 112.09 55.75
TOTAL 3112.95 3044.42 (-)68.53 (-)2.20

B) EXPENDITGURE
Interest paid 2609.52 2143.46 (-)466.06 (-)17.86
Establishment Charges 360.52 325.76 (-)34.76 (-)9.64
Contingent Charges 114.02 54.32 (-)59.72 (-)52.36
Reserve for Depreciation 1.88 4.84 2.96 157.45
Other Reserves Created 1228.30 2626.12 1397.83 113.80
TOTAL 4314.24 5154.50 8405.26 19.48
Net Loss before Tax (-)1201.29 (-)2110.08 908.79 75.65

(A-B)

INTERPRETATION

1) The financial performance of the Warangal District Co-operative Central

Bank has recorded a total income of Rs. (-) 68.53 lakhs that is 2.20% and

the total expenditure is recorded has Rs. 840.26 lakhs that is 19.48%.

2) Other Serve created are increased by Rs. 1397.82 lakhs that is 113.8%.

3) The financial position is not satisfactory.

35
COMPARATIVE INCOME STGATEMENT OF WARANGAL

DISTRICT CO-OPERATIVE CENTRL BANK LTD., FOR THE

YEAR ENDING 31st MARCH 2008 TO 2009

(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2008 31-3-2009 Inc / Dec %
Amount
A) INCOME
Interest earned 2731.26 2758.44 27.18 0.99
Miscellaneous Receipts 313.16 677.66 364.50 116.39
TOTAL 3044.42 3436.10 391.68 12.86

B) EXPENDITGURE
Interest paid 21.43.46 2048.78 (-)94.68 (-)4.42
Establishment Charges 325.76 345.80 20.04 6.15
Contingent Charges 54.32 119.08 64.76 119.22
36
Reserve for Depreciation 4.84 2.04 (-)2.8 (-)57.85
Other Reserves Created 2626.12 790.00 (-)1836.12 (-)069.92
TOTAL 5154.50 3305.70 1848.80 (-)6.82
Net Loss before Tax
(-)2110.08 130.40 (-)1457.12 (-)69.05
(A-B)

INTERPRETATION

1) The statement shows that the both the Interest earned and miscellaneous

receipts are slightly increased by 0.99% and 116.39%. Thus the total

income has declined by 12.86%.

2) The contingent charges as increased by Rs. 64.76 lakhs that is 119.22%

and also the other reserves created as decreased by Rs. (-) 1836.12 lakhs

that is (-) 69.92%. Thus the total expenditure has declined by (-) 6.82%.

3) The financial position is not satisfactory.

37
Comparative Balance sheet of the Warangal District Co-operative

Central Bank Ltd., as on 31-3-2009 to 31-3-2010

(Rs. In Lakhs)
Inc / Dec
PARTICULARS 31-3-2009 31-3-2010 Inc / Dec %
Amount
ASSETS
CURRENT ASSETS
Cash & Bank balance 357.09 103.36 (-)253.73 (-)71.05
Investments 4975.50 7058.52 2083.02 41.86
Loans & Advances 32558.86 3331.21 759.35 2.33
Govt. Securities -- -- -- --
Fixed Assets 55.88 56.05 0.17 0.30
Interest Receivable 3565.19 4080.66 515.47 14.45
Other Assets 568.14 804.98 239.84 42.21
Closing Stock -- -- -- --
Miscellaneous 284.65 595.27 310.62 109.12
Loss 6814.56 6521.50 (-)293.06 (-)4.30
Total Current Assets 49179.87 52541.55 3361.68 134.92

CURRENT LIABILITIES
Deposits 6312.95 8373.31 2060.36 32.63
Interest Payable 2444.71 2758.89 314.18 12.85
Borrowing 25028.94 25046.67 17.73 0.07
Miscellaneous -- -- -- --
Capital 5182.60 5352.39 169.79 3.27
Reserve & Funds 1035.91 1106.89 70.98 6.85
Total Current Liabilities 40005.11 42638.15 2633.04 55.67

38
INTERPRETATION

1) There is undesirable decrease in cash and bank balance which is Rs (-)

253.73 lakhs that is (-)71.05.

2) Deposits of bank have show flight increase of Rs. 2060.36 lakhs that is

32.63% and the loan and advance have decreased by 759.35 lakhs that is

2.33%.

3) Barrowings this year have decreased that is Rs. 17.73 lakhs that is 0.07%.

4) The Deposits of the bank have been showed a increase Rs. 2060.36 that is

32.63%.

5) Other Assets are increased Rs. 239.84 lakhs which is the 42.21%. But there

desired Assets are decreased.

39
5.2 RATIO ANALYSIS

Current Ratio:

Meaning : This ratio establishes a relation ship between current assets and

current liabilities.

Objectives : The Objective of computing this ratio is to measure the ability

of the firm to meet its short-term obligations and to reflect the short-term financial

strength/solvency of a firm. In other words. The objective is to ensure the safety

margin available for short-term creditors.

Components : There are two components of this relation which are a under

Current Assets : Which mean the assets which are held for there conversion in

to catch with in a Year

Current Liabilities :Which mean the liabilities which are expected to be matured

with in a year.

Computation : This ratio is computed by dividing the current assets by the

current liabilities.

This ratio is usually expressed as a pure ratio example 2:1 in the form of a

formula, this ratio may be expressed as under.

Current Ratio = Current Assets / Current Liabilities

(Rs.In Lakhs)

Years Current Assets Current Liabilities Current Ratio


2005-06 22449.79 20664.04 1.09
2006-07 26437.28 24258.83 1.09
2007-08 29331.59 25568.96 1.15
2008-09 33059.20 26724.66 1.24
2009-10 55886.02 56646.62 0.98

The Current assets of WDCCB includes cash & Bank balances, Loans &

Advances. Closing Stocks. Miscellaneous, Loss & Interest Receivable. Where as

Current Liabilities includes Deposits, Borrowings, Miscellaneous and Interest

Payable.
40
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INTERPRETATION

From the above table 1 is observed that the Current ratio is always

below the ideal Ratio of 2:1 during the period under study. The table shows

decreasing trend from 2005 to 2008 from 1.15. The highest Current Ratio was

in the year 2009 where the current ratio was 1.24 in 2010 the ration showed

0.098 respectively.

DEBT EQUITY RATIO :

a) Meaning: The ratio establishes a relationship between out side borrowing

owned funds of any enterprise.

41
b) Objective : This Objective of computing this ratio is to measure the relative

proportion of debt and equity in financing the assets of a firm.

c) Components : Long-term debts which man Long-term loans (Whether secured

or un-secured e.g. Debentures, bonds, loans from financial institutions)

d) Computation : This ratio is computed by dividing the long-term debts by the

shareholders funds. This ratio is usually expressed as proportions e.g. 2:1

Formula:

Debt Equity ratio = Total Debts (Outstanding borrowings) /

Total Equity (Equity + Reserve Funds)

Debt Equity Ratio = Outside funds

Shareholders funds

(Rs.In Lakhs)

Years Debt Equity Debt Equity Ratio


2005-06 14165/42 3715.34 3.81
2006-07 15727.85 4593.83 3.44
42
2007-08 17053.94 5836.62 2.92
2008-09 17862.64 8454.24 2.11
2009-10 27034.75 31610.00 0.85

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INTERPRETATION

The table reveals that the Debt equity ratio is showing a continuous

decrease for 3 years that is from 2007 to 201 for succeeding 2 years it has shown

an increasing grand from 2005 – 2007.

The debt equity ratio has always been more that 2:1 indicating excess

dependence on out side borrowings than the owned funds, which will increase the

interest and principle payment obligation on the bank. Average debt equity ratio is

0.85.

Credit Deposit Ratio

Meaning : This ratio is the relationship between the credit given by bank to total

deposit raise by it.

Objective : To increase the performance of bank by comparison with other banks.

Components : There are two components of this relation, which are under

43
– Advances

– Deposits

Computation : This ratio is computed by dividing the loans by the deposits. It is

expressed as percentage. It is calculated as under.

CREDIT DEPOSIT RATIO = ADVANCE


x 100
DEPOSITS

(Rs.In Lakhs)

Years Advances Deposits Credit Deposit


Ratio

2005-06 17099.97 4780.12 357.73

2006-07 20697.32 6399.92 323.40

2007-08 22101.22 5672.28 389.63

44
2008-09 22161.33 5567.75 398.03

2009-10 64827.05 14983.48 432.66

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INTERPRETATION:

The table reveals that credit deposit ratio decrease from 323.40% in 2006-07 to

increase in 432.66 in 2009-10.

Equity Loan Ratio

Meaning : Equity to loan ration is measured to know as to how much equity has

been invested this issue of loans

45
Objective : High ratio indicates keen participation of equity in the loaning

operations of bank

Components : There are two components of this relation, which are as under

– Equity

– Loans ( Advances)

Computation : This ratio is computed by dividing the equity by the loans and

advances. It is Expressed as percentage. It is calculated as

under

Equity Loan Ratio = Equity /


X 100
Loans (Advances)

(Rs.In Lakhs)

Years Equity Advances (loans) Equity-loan Ratio

2005-06 3715.34 17099.97 21.73

2006-07 4593.83 20697.32 22.19

2007-08 5836.62 21101.22 26.41

2008-09 8454.24 22161.33 38.15

2009-10 1699.53 3053.14 55.68


46
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INTERPRETATION :

The table reveals that equity to loan ratio to decrease from 21.73% in 2005to

increase in 55.68 in 2009-10. Indicating a tendency of increasing participation of

equity in the loaning operations of the bank.

Gross Profit Ratio:

Meaning: This ratio establishes a relationship between Gross Profit and

Advances.

Objectives: The Objective of computing this ratio is to determine the efficiency of

procurement of fund and utilization of funds.

Components: There are two components of this relation which are a under

Gross Profit

Advances
47
Computation: This ratio is computed by dividing the Gross Profit by the interest

income. It is Expressed as Percentage. It is calculated as under

Gross Profit
Gross Profit Ration= --------------- x 100
Advances

Gross Profit ratio reveals the gross income of the banks, which is available to the

management to meet the non-interest cost commitments.

(Rs. In Lakhs)

Gross Profit Gross Profit


YEAR Income Advances (loans) Ratio
2005-06 2386.84 17099.97 13.96
2006-07 2488.34 20697.32 12.02
2007-08 3112.95 22101.22 14.08
2008-09 3044.42 22161.33 13.74
2009-10 4091.16 32558.86 12.56

48
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INTERPRETATION:

The lowest gross profit ratio was 12.02 in 2006-07. The highest gross profit ratio

was 14.08 in 2007-08.

Quick Ratio:

Components: There are two components of this relation which are under

– Quick Assets

– Current Liabilities

49
Computation: This ratio is computed by dividing the quick assets by the Current

Liabilities. It is expressed as percentage. It calculated as under.

Quick Assets
Quick Ratio = ------------------------- x 100
Current Liabilities

Quick Assets = Current Assets – Stock + Prepaid Expenses

Current
YEAR Quick Assets Liabilities Quick Ratio

2005-06 20819.39 24379.39 0.853

2006-07 30435.58 31405.58 0.96

2007-08 34878.90 35178.90 0.99

2008-09 36463.91 36533.91 0.998

2009-10 49179.87 40005.11 1.22

50
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INTERPRETATION:

The Table reveals that the Quick ratio is showing a continuous increasing from

2005 – 10

51
SUPER QUICK RATIO:

Computation: This Ratio is Computed by dividing the Cash+Bank+Marketable

Securities by the Current Liabilities.

Cash+Bank+Marketable Securities
Super Quick Ratio = ----------------------------------------------
Current Liabilities

Super Quick Current

YEAR Ratio Liabilities Ratio


2005-06 2194.24 24379.39 0.090
2006-07 2072.30 31405.58 0.065
2007-08 2067.51 35178.90 0.658
2008-09 2557.05 36533.91 0.069
2009-10 5332.59 40005.11 0.133

52
243105R
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INTERPRETATION:

The Table reveals that the super quick ratio is showing slight increase shown 2005-

07 to 2009 – 10.

53
CHAPTER – V
CONCLUSIONS&SUGGESTIONS

1. The authorized share capital is Rs. 22 Crores, and paid up share capital of

Rs. 1719.44 lakhs. There was an increase in the share capital with a

marginal increase in the deposits out standing. It reveals that the bank is

giving much loans and advances to the societies.

2. The Reserves at the beginning of review period that is 1999-2000 the

reserves were of Rs. 1995.0 lakhs and it more than doubled to Rs. 6829.42

lakhs in the last year of the study 2009-2010. As the reserves are sources

of long-term finance, so it could meet its long-term obligations very easily.

3. The Co-operative bank’s main objective is to ensure financial support to

agriculture activities: anyhow the WDCCB is giving financial support to

accumulated loss the profit is deducted from the loss.

4. The bank has been very much successful in mobilizing the deposits; it has

been following positive policies by giving its members various options of

depositing their saving as discussed in earlier chapter. The present

depositsof Rs. 4780.12 lakhs in 2005-06 and increase by Rs. 5651.94

lakhs.

5. The bank’s operations are mainly borrowings and loans and loans and loans

and advances to societies. The bank is getting sufficient borrowing from

APCOB a and other Govt. Banks. The Borrowings are to increased by Rs.

21211.81 lakhs in the year 2009-10.

6. The bank’s Investments are increased by Rs. 4745.97 lakhs it will shows the

efficient decision-making by the management. Because the investments will

give the fixed rate of interest to the Bank it will lead the bank of sufficient

working capital.

54
7. The current ratio has always been below the ideal ratio of 2:1 the average

current ratio during the six years period is 1.23. It indicates that

management has failed to maintain sufficient cushion of protection to current

liabilities of the bank.

8. This average debt equity ratio for the six years period under study is 1.78. It

indicates more Reliance on borrowings compared to owned funds.

9. The credit deposit ratio has increased from 357.73 percent in the year 2000

to 4888.72 percent in the year 2008 indicating efficient performance of the

management in attracting adequate deposits.

10. The net profit ratio has been a poor performance indicating losses in the

year 2005 to 20010. During the last year, the NPR varied between 0.94

indicating poor operating efficiency of the bank.

SUGGESTIONS :

• The firm should try to reduce the amount invested in current assets,

there by the current ratio should come down to ideal ratio.

• The bank that the firm should try to reduce current assets there by

the funds invested in current assets should divert to purchase fixed

assets, further the profitability may be increased.

• The bank that to increase debt equity ratio of the bank, otherwise, it

becomes in trouble to net current liabilities.

55
• The bank that to increase the credit deposit ratio by developing sales

of the bank and decreasing the operating costs.

• The bank that should try to decrease the operating cost otherwise,

the bank may go under losses.

• The bank that should try to increase the gross profit by increasing the

sales of the bank.

BIBILIOGRAPHY

BOOKS:

1. M. Khan and P.K. Jain Financial Management Mc. Graw – Hill

2. L.M. Bhole, Financial Institutions and Markets, Tata Mc. Graw-

Hill, 2006.

3. Prasanna Chandra – Financial Management, Tata Mc. Graw-Hill

Publishing New Delhi 2006.

WEBSITE:

1. www. Bankers.com

56
OTHER:

1. Annual Reports of the Bank.

CONCLUSIONS AND SUGGESTIONS

1. The authorized share capital is Rs. 22 Crores, and paid up share capital of

Rs. 1719.44 lakhs. There was an increase in the share capital with a

marginal increase in the deposits out standing. It reveals that the bank is

giving much loans and advances to the societies.

57
2. The Reserves at the beginning of review period that is 1999-2000 the

reserves were of Rs. 1995.0 lakhs and it more than doubled to Rs. 6829.42

lakhs in the last year of the study 2009-2010. As the reserves are sources

of long-term finance, so it could meet its long-term obligations very easily.

3. The Co-operative bank’s main objective is to ensure financial support to

agriculture activities: anyhow the WDCCB is giving financial support to

accumulated loss the profit is deducted from the loss.

4. The bank has been very much successful in mobilizing the deposits; it has

been following positive policies by giving its members various options of

depositing their saving as discussed in earlier chapter. The present

depositsof Rs. 4780.12 lakhs in 2005-06 and increase by Rs. 5651.94

lakhs.

5. The bank’s operations are mainly borrowings and loans and loans and loans

and advances to societies. The bank is getting sufficient borrowing from

APCOB a and other Govt. Banks. The Borrowings are to increased by Rs.

21211.81 lakhs in the year 2009-10.

6. The bank’s Investments are increased by Rs. 4745.97 lakhs it will shows the

efficient decision-making by the management. Because the investments will

give the fixed rate of interest to the Bank it will lead the bank of sufficient

working capital.

7. The current ratio has always been below the ideal ratio of 2:1 the average

current ratio during the six years period is 1.23. It indicates that

management has failed to maintain sufficient cushion of protection to current

liabilities of the bank.

8. This average debt equity ratio for the six years period under study is 1.78. It

indicates more Reliance on borrowings compared to owned funds.

58
9. The credit deposit ratio has increased from 357.73 percent in the year 2000

to 4888.72 percent in the year 2008 indicating efficient performance of the

management in attracting adequate deposits.

10. The net profit ratio has been a poor performance indicating losses in the

year 2005 to 20010. During the last year, the NPR varied between 0.94

indicating poor operating efficiency of the bank.

BIBILIOGRAPHY

BOOKS:

1. M. Khan and P.K. Jain Financial Management Mc. Graw – Hill

2. L.M. Bhole, Financial Institutions and Markets, Tata Mc. Graw-

Hill, 2006.

59
3. Prasanna Chandra – Financial Management, Tata Mc. Graw-Hill

Publishing New Delhi 2006.

WEBSITE:

1. www. Bankers.com

OTHER:

1. Annual Reports of the Bank.

60