Financial Analysis: Title Page

Title Page
FINANCIAL ANALYSIS
OF
SHREE INVESTMENT & FINANCE COMPANY LIMITED
A Project Work Report
Submitted By
Rashmi Bhusal
Shwoyambhu International College
T.U. Regd. No: 7-2-927-188-2015
Symbol No: 9270199
Submitted to
The Faculty of Management
Tribhuwan University
Kathmandu
In Partial Fulfillment of the Requirements for the Degree of
BACHELOR OF BUSINESS STUDIES (BBS)
Kathmandu
May, 2020
i
DECLARATION
I hereby declare that the project work entitled FINANCIAL ANALYSIS OF SHREE
INVESTMENT & FINANCE COMPANY LIMITED submitted to the Faculty of
Management, Tribhuwan University, Kathmandu is an original piece of work under the
supervision of Mr. Raju Raut, faculty member, Shwoyambhu International College,
Kathmandu, and is submitted in partial fulfillment of the requirements for the degree of
Bachelor of Business Studies (BBS). This project work report has not been submitted to any
other university or institution for the award of any degree or diploma.
Signature:
Rashmi Bhusal
Date:
ii
SUPERVISOR'S RECOMMENDATION
The project work report entitled FINANCIAL ANALYSIS OF SHREE INVESTMENT &
FINANCE COMPANY LIMITED submitted by Rashmi Bhusal of Swoyambhu International
College, Kathmandu, is prepared under my supervision as per the procedure and format
requirements laid by the Faculty of Management, Tribhuwan University, as partial fulfillment
of the requirements for the degree of Bachelor of Business Studies (BBS). I, therefore,
recommend the project work report for evaluation.
Signature:
……………….
Name of Supervisor: Raju Raut
Date:
iii
ENDORSEMENT
We hereby endorse the project work report entitled FINANCIAL ANALYSIS OF SHREE
INVESTMENT & FINANCE COMPANY LIMITED submitted by Rashmi Bhusal of
Swoyambhu International College, Kathmandu, Nepal, in partial fulfillment of the
requirements for the degree of the Bachelor of Business Studies (BBS) for external
evaluation.
Signature: Signature:
Dr. Hari Sharan Chakhun Suman Chaudhary
Chairman Research Committee Campus Chief/Principal
Date: Date:
iv
ACKNOWLEDGEMENT
This report has been prepared in partial fulfillment of requirement of the Bachelor on
Business Studies final year course. I would like to express my gratitude to Swoyambhu
International College for providing a great opportunity of preparing a field work report in
accordance to its syllabus. What so ever was the situation this report is finally prepared with
the help and guidance of many of my well-wishers.
I am very much thankful to all the teacher of Swoyambhu International College;

without whose knowledge and suggestions in several ways, this report would not have been
prepared. My special thanks go to my teachers and lecturers in Swoyambhu International,
who helped and guided me a lot in preparing this report.
I am also very much indebted to Shree Investment & Finance Company Limted, and
its concerned official for providing me the necessary data’s and information related with the
company. Their friendly behavior and warm co-operation very much force me for heartily
thanks.
While preparing this report, I would like to express my sincere thanks and gratitude to
my teacher for his good guidance, comment, and suggestion.
Rashmi Bhusal
Date:
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TABLE OF CONTENTS
Title Page i
Declaration ii
Supervisor's Recommendation iii
Endorsement iv
Acknowledgement v
Table of Contents vi
List of Tables viii
List of Figures ix
Abbreviations x
CHAPTER ONE: INTRODUCTION 1
1.1 Background of Study 1
1.2 Profile of organization 2
1.2.1 Board of Directors of Shree Investment & Finance Company Limited 3
1.2.2 Capital Structure Plan of Bank 3
1.3 Present Shareholding Pattern of Bank 3
1.4 Statement of the Problem 4
1.5 Objective of Study 4
1.6 Rationale of Study 4
1.7 Review 4
1.7.1 Theoretical Review 4
1.7.2 Empirical Review 5
1.7.3 Research Gap 6
1.8 Methods 8
1.8.1 Research Methodology 8
1.8.2 Research Design 8
1.8.3 Data Collection 8
1.8.4 Data Presentation and Analysis Tool 9
1.9 Limitation of the study 15
CHAPTER TWO: RESULTS AND ANALYSIS 16
2.1 Data Presentations 16
2.1.1 Liquidity Ratio 21
2.1.2 Profitability Ratio 27
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2.1.3 Leverage Ratio 34
2.1.4 Activity Ratio 35
2.2 Statistical Analysis 41
2.2.1 Mean 41
2.2.2 Standard Deviation 42
2.2.3 Coefficient of Variation (CV) 42
CHAPTER THREE: SUMMARY AND CONCLUSION 43
3.1 Summary 43
3.2 Conclusion 44
BIBLIOGRAPHY 46
APPENDICES 47
Appendix 1: Comparative Balance Sheet of Last Five Years 47
Appendix 2: Comparative Statement of Profit & Loss of Last Five Years 48
Questionnaire 49
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LIST OF TABLES
Pg. No.
Table 2.1: Response Rate of Questionnaire 17
Table 2.2: Response of the Questionnaires 17
Table 2.3: Current Ratio 21
Table 2.4: Cash & Bank Balance to Total Deposit Ratio 22
Table 2.5: Cash and Bank Balance to Current Assets Ratio 23
Table 2.6: Cash and Bank Balance to Current Deposit Ratio 23
Table 2.7: Loans and Advances to Total Deposit Ratio 24
Table 2.8: Fixed Deposit to Total Deposit Ratio 25
Table 2.9: Saving Deposit to Total Deposit Ratio 26
Table 2.10: Net Profit to Total Assets Ratio 27
Table 2.11: Net Profit Total Deposit Ratio 28
Table 2.12: Return on Shareholder's Equity 28
Table 2.13: Return on Investment 29
Table 2.14: Earnings per Share 30
Table 2.15: Dividend per Share 31
Table 2.16: Cash Dividend per Share 32
Table 2.17: Price Earnings Ratio 33
Table 2.18: Long term debt to shareholders’ fund ratio 34
Table 2.19: Total debt to Total Assets ratio 35
Table 2.20: Total Investment to Total Deposit Ratio 36
Table 2.21: Loans and advances to Total Deposit Ratio 36
Table 2.22: Non-Performing Loan to Loan & Advances Ratio 37
Table 2.23: Loan & Advances to Fixed Deposit Ratio 38
Table 2.24: Loan loss Provision to Total Loans and Advances Ratio 39
Table 2.25: Net Interest Rate Spread 40
Table 2.26: Calculation of Standard Deviation of Cash & Balance & Deposit 41
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LIST OF FIGURES
Pg. No.
Fig 2.1 : Response Rate of Questionnaire 17
Fig 2.2.1 : Response related with Financial Position and Performance of 18
SIFCO
Fig 2.2.2 : Response related with difficulty in Operation of Finance 18
Company
Fig 2.2.3 : Response related with knowledge of latest financial statement of 19
SIFCO
Fig 2.2.4 : Response related with views on Investors profitability against 19
Investment in SIFCO
Fig 2.2.5 : Response related with views on satisfaction regarding Profitability 20
of SIFCO
Fig 2.2.6 : Response related with knowledge on Future program of the 20
Company
Fig 2.3 : Current Ratio 21
Fig 2.4 : Cash & Bank Balance to Total Deposit Ratio 22
Fig 2.5 : Cash and Bank Balance to Current Assets Ratio 23
Fig 2.6 : Cash and Bank Balance to Current Deposit Ratio 24
Fig 2.7 : Loans and Advances to Total Deposit Ratio 25
Fig 2.8 : Fixed Deposit to Total Deposit Ratio 25
Fig 2.9 : Saving Deposit to Total Deposit Ratio 26
Fig 2.10 : Net Profit to Total Assets Ratio 27
Fig 2.11 : Net Profit to Total Deposit Ratio 28
Fig 2.12 : Return on Shareholder's Equity 29
Fig 2.13 : Return on Investment 30
Fig 2.14 : Earnings per Share 31
Fig 2.15 : Dividend per Share 31
Fig 2.16 : Cash Dividend per Share 32
Fig 2.17 : Price Earnings Ratio 33
Fig 2.18 : Long term debt to shareholders’ fund ratio 34
Fig 2.19 : Total debt to Total Assets ratio 35
Fig 2.20 : Total Investment to Total Deposit Ratio 36
Fig 2.21 : Loans and advances to Total Deposit Ratio 37
Fig 2.22 : Non-Performing Loan to Loan & Advances Ratio 38
Fig 2.23 : Loan & Advances to Fixed Deposit Ratio 39
Fig 2.24 : Loan loss Provision to Total Loans and Advances Ratio 40
Fig 2.25 : Net Interest Rate Spread 41
ix
x
ABBREVIATIONS
CBB = Cash and Bank Balance

CV = Coefficient of Variation
DPS = Dividend per Share
EPS = Earnings per Share
i.e. = That is
Ltd. = Limited
MPS = Market Value per Share
No. = Number
NP = Net Profit
NPAT = Net Profit after Tax
NRB = Nepal Rastra Bank
PE Ratio = Price Earnings Ratio
P&L Account = Profit and Loss Account
ROA = Return on Assets
ROE = Return on Equity
SD = Standard Deviation
SIFCO = Shree Investment & Finance Company Limited
TD = Total Deposit
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1
CHAPTER ONE
INTRODUCTION
1.1 Background of Study
Financial analysis is the examination of a business from a variety of perspectives in order to

fully understand the greater financial situation and determine how best to strengthen the
business. A financial analysis looks at many aspects of a business from its profitability and
stability to its solvency and liquidity. The ability to understand financial data is essential for
any business manager. Business goals and objectives are set in financial terms and their
outcomes are measured in financial terms.
Profitability is the most common measure of an enterprise including the banking industry.
Profitability refers to the state or condition of yielding or earning a financial profit or gain. It
refers to the ability of the company to use its resources to generate revenues in excess of its
expenses. Similarly, profitability ratios are generally considered to be the basic bank financial
ratio in order to evaluate how well bank is performing in terms of profit. For the most part, if
a profitability ratio is relatively higher as compared to the competitor(s), industry averages,
guidelines, or previous years’ same ratios, then it is taken as indicator of better performance
of the bank.
Liquidity refers to a company's ability to pay its current bills and expenses. In other words,
liquidity relates to the availability of cash and other assets to cover accounts payable, short-
term debt, and other liabilities. It is characterized by the use of converting an asset into
money at a little cost. In the assets side of the balance sheet of the commercial bank, will be
liquid assets, which can be easily converted into cash- such assets are called liquid assets.
Liquidity can also be defined as the finance company’s ability to meet immediate maturing
liabilities. Liquid assets mainly include cash and bank balances money at call and short
notice, investment in government securities such as treasury bills, development bonds, saving
bonds etc.
The liquidity management function of a finance company is regular one. It is known that
finance company liquidity is the most sensitive and importance aspect. A finance company
can’t be imagined without liquidity. The finance company should keep the stock of liquid
assets in the ratio of their deposit liability, as fixed by the Nepal Rastra Bank. The importance
of liquidity is as follows:
a) To meet the expenses for the finance company's daily administrative work.
b) To pay all sorts of deposits.
c) To control the economic fluctuation and to keep safe from the risk.
d) To fill the demand of the debtor.
e) Providing security to the finance company.
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Companies rely on a mixture of owners' equity and debt to finance their operations. A

leverage ratio is any one of several financial measurements that look at how
much capital comes in the form of debt (loans), or assesses the ability of a company to meet
financial obligations.
Activity ratios measure the relative efficiency of a firm based on its use of its
assets, leverage or other such balance sheet items and are important in determining whether a
company's management is doing a good enough job of generating revenues and cash from its
resources.
There are several definition of a bank by different authors and scholar’s .some of them is as
follows:
“Bank deal in accepting the saving of people in the form of deposit collection and invest in
the productive area." (Fischer, 1989)
“Bank is an organization whose principle operation is concerned with accumulation for the

temporarily idle with money of the general public for the purpose of advancing to other
expenditure.” (Kent, 1896 AD)
1.2 Profile of organization
Shree Investment & Finance Company Limited

Vision and Mission
Shree Investment & Finance Company Limited (SIFCO) was incorporated in the year 1994
(2051 BS) by a group of eminent businessmen from Kathmandu , as a Financial Services
Company and a Merchant Finance company under the Nepal Finance Company Act, 1985
and the Nepal Company Act, 1964. The Company has been licensed by the Nepal Rastra
Finance company as “C” class Financial Institution to undertake finance services and
merchant finance companying activities in the country.
The company started its operations on 2051-03-22 B.S with an authorized share capital of
Rs.640 Million, issued capital of Rs.200 Million and paid-up capital of Rs.100.8 Million. In
keeping with the growth targets, the company has kept increasing its capital base. Today, the
company has an authorized share capital of Rs.1000 Million, issued capital of Rs.800 Million
and paid-up capital of Rs.800 Million.
The Company presently has 9 branch offices outside of Kathmandu valley and 1 Head Office
in Kathmandu. The Company also plans to geographically spread out to other parts of the
country in the near future.
Today SIFCO has prominently grown over the years, from Fixed, Recurring, and Saving
Deposits to Loans & Advances. SIFCO has accomplished for itself a niche position in the
Nepalese Financial Sector while firmly adhering to a policy of prudence and caution,
company has been in the forefront of introducing various innovative products and services.
3
4
1.2.1 Board of Directors of Shree Investment & Finance Company Limited
The present board members of the finance company are as follows:
Name Designation
Mr. Sashi Raj Pandey Chairman
Mrs. Chandra Lekha Pandey Director
Mr. Samson J.B. Rana Director
Mr. Umesh Bhagat Pradhananga Director
Mr. Ram Krishna Sharma Wagle Director
Mr. Mahesh Prasad Adhikari Director

(Sources: Websites of Shree Investment & Finance Company Limited)
1.2.2 Capital Structure Plan of Bank
Nepal Rastra Bank prescribes the minimum capital, issued Capital and Paid up Capital of the
licensed institutions in time to time and it is the responsibility of BFIS to maintain such level
of capital structure. NRB has prescribed ‘C’ class licensed institution to maintain a capital of
Rs.800 Million by the end of FY 2073/74. The paid up capital of the finance company in the
FY 2074/75 is Rs.800.15 million. It has proposed bonus share of 9.85 million in the FY
2074/75 from the profit of the respective year, after which the paid up capital of the bank will
be 810 million.
1.3 Present Shareholding Pattern of Bank
Present bank’s shareholding pattern of Shree Investment & Finance Company is 60%
promoters and 40% general public.
Particulars Amount in Rs. Million

Authorize Capital 100,000,000
Issued Capital 800,150,000
Paid Up Capital 800,150,000
Promoters’ Contribution 60%
Public Contribution 40%
Sources: Annual Report of Shree Investment & Finance Company Limited
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1.4 Statement of the Problem
A decent financing system with assortments of services to fulfill commerce, trade industry
and agriculture needs of the country is essential for Nepal. It very well may be pictured that
the finance sector in Nepal is at its infant stage. However, in the recent period the finance
company have appeared to be showing good financial performance. In these conditions, it is
exceptionally suitable to make a research on SIFCO. This research should enable the users to
see clear image of the performance of the finance company.
The assessment has not been made to pass judgments on the financial performance of SIFCO.
Generally, its stock prices are considered for its better performance yet one can bring up the
question whether it is sufficient to reflect the financial performance of SIFCO.
The primary issue of the investigation is to ask whether the investigation of the financial
performance of SIFCO has expected to discover the following inquiries:
a) How well is the financial performance of SIFCO?

b) Is the finance company keeping up its liquidity proportions?
From the above focuses, the fundamental purpose behind the research is analyzing whether
the financial performance of SIFCO gives genuine and reasonable view regarding
profitability, liquidity, turnover, and effectiveness in operation.
1.5 Objective of Study
The general objective of this research will be analyzing the financial statements of SIFCO
regarding the financial position and performance. Other specific objectives are as follows.
a) To analyze the financial performances through the use of appropriate financial and
analytical tools.
b) To analyze profitability, liquidity, leverage, activity ratio of SIFCO
1.6 Rationale of Study
For the overall development of the country, development of economic condition of the
country is very important. Finance company is an organization which collects the deposits
and provide loans, simply it utilizes and manages the fund of nation. The study intends to
provide financial overview of such Finance company.
1.7 Review
1.7.1 Theoretical Review
The main objectives of the Finance company are to collect deposits as much as possible from
the customers and to mobilize into the most profitable sector. If a Finance company fails to
utilize its collected resources then it cannot generate revenue. Resource mobilization
6
management of Finance company includes resource collection, investment portfolio, loans

and advances, working capital, fixed assets management etc. It measures the extent to which
a Finance company is successful to utilize its resources. To measure a Finance company's
performance in many aspects, we should analyze its financial indicator with the help of
financial statements.
Financial analysis is the process of identifying the financial strength and weakness of the
concerned Finance company. Financial statement analysis is a method of reviewing and
analyzing a company's accounting reports (Financial statements) in order to gauge its past,
present or projected future performance. This process of reviewing the financial statements
allows for better economic decision making. It is performed to determine the following:
 Profitability
 Liquidity
 Solvency
 Efficiency
The function or the performance of finance can be broken down into three major decisions
i.e. the investment decision, the financing decision, and the dividend decisions. An optional
combination of the three decisions will maximize the value of the firm.
1.7.2 Empirical Review
Tarawneh (2006) analyzed the financial statement of five Omani banks for the financial
period 1999-2003. In addition, he used simple regression to estimate the impact of asset
management, operation efficiency, and bank size on the financial performance of these banks.
The results showed that financial performance of the banks was strongly and positively
influenced by the operational efficiency, asset management, and bank size.
Almazari (2011) in his study attempted basically to measure the financial performance of
seven Jordanian commercial banks for the period 2005-2009, by using simple regression in
order to estimate the impact of independent variable represented by; the bank size, asset
management, and operational efficiency on dependent variable financial performance
represented by; return on assets and interest income size. It was found that banks with higher
total deposits, credits, assets, and shareholders’ equity do not always mean that has better
profitability performance. Also found that there exists a positive correlation between financial
performance and asset size, asset utilization and operational efficiency, which was also
confirmed with regression analysis that financial performance is greatly influenced by these
independent factors.
Haque and Sharma (2011), their research studied the hypotheses tested imply that there are
significant differences amongst Saudi banks. The financial performance of banks in Saudi
Arabia is studied on the basis of financial variables and ratios through the help of Spearman's'
rank correlation method. Although, benchmarking performance of banks is done using
advanced linear programming models, this study attempts to develop an efficiency frontier on
the basis of simple linear regression. Albeit certain restrictive assumptions, this study
7
identifies Al Rajhi bank to be the best bank to which other banks could look up to and
justifies this model on the basis of parsimony.
Almumani (2014) the purpose of his study is to analyze and compare the performance of
Saudi banks that listed in stocks market for the period 2007-2011. The study is an evaluator
in nature, drawing sources of information from secondary data. The financial performance of
banks is studied on the basis of financial ratios and variables. Financial performance was
measured by two approaches; trend analysis and inter-firm analysis. It was found that
increasing of assets, operating expenses, and cost to income causes a decrease in Saudi
bank’s profitability, while increasing of operating income causes an increase in the
profitability of Saudi Banks. Analysis shows that all the variables of study have a positive
mean value and all banks are generating income. Saudi joint venture banks proved to be more
proficient in generating profits, absorbing loan losses and dominating in ROE, while, Saudi
established banks have more capacity of absorbing asset losses and dominating in ROA.
Kumal (2015) evaluated the financial performance of M/s Kumari Bank Limited, a
commercial bank in Nepal taking the period of three financial years in considerations, from
FY 2011/12 to FY 2012/13. The results showed that the financial position of M/s Kumari
Bank Limited is satisfactory and in good position.
In the Gulf, Samad (2004) investigated the performance of seven locally incorporated
commercial banks during the period 1994-2001. Financial ratios were used to evaluate the
credit quality, profitability, and liquidity performances. The performance of the seven
commercial banks was compared with the banking industry in Bahrain which was considered
a benchmark. The article applied a Student’s t-test to measure the statistical significance for
the measures of performance. The results revealed that commercial banks in Bahrain were
relatively less profitable, less liquid and were exposed to higher credit risk than the banking
1.7.3 Research Gap
Going through the above study, it can be said that financial analysis is an important element
for every financial institution as it helps in managing the assets and liabilities, which is
raising problem for financial institutions. Here, in this study efficient utilization of assets and
its impact on financial performance is also included because the smooth financial
performance is dependent on availability of assets in an organization. This research work has
tried to include overall financial performance of Shree Investment & Finance Company
Limited calculating the profitability ratios, liquidity ratios, activity ratios and leverage ratios.
Therefore, this study is useful to the concern bank as well as different persons such as
shareholders, investors, policy makers, stockholders, state of government.
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Current Ratio
Credit Deposit Ratio
Fixed Deposit to Total Deposit
Saving Deposit to Total Deposit
Return on Investment Independent variables
Return on Shareholder’s Fund Dependent variable
Return on Deposits
Dividend per Share
Earnings per Share
Long Term Debt to Shareholders’
Fund Financial
Total Debt to Total Assets Ratio performance
Loan & Advances to Total Deposit
Ratio
Non-performing Loans to Total
Loans & Advances
Loan Loss Provision to Total Loans
& Advances
Net Interest Spread Rate
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1.8 Methods
1.8.1 Research Methodology
Research methodology refers to the various segmental steps along with the rationale of each
step to be adopted by a researcher in studying a problem with certain objectives in view. In
other words research methodology describes the methods and process applied in the entire
aspects of the study. It helps to collect reliable data and information from various sources in
order to prepare report writing.
1.8.2 Research Design
The research design will consists of descriptive research designs to deal with the various
aspects. The descriptive research design will be developed with the aim of studying the
subject of research in detail.
1.8.3 Data Collection
There are various data collection sources are available i.e. primary sources and secondary
sources. The major data used in this project report are collected from secondary sources. The
sources of detailed data are as follows.
Primary data:
The data, which is first time collected for an investigation by an investigator or his /her agent
or research organization, is known as primary data. It is original in character and just like raw
material. I used the following procedures to collect the primary data.
 Direct personal Interview.

 Observation method.
 Information from local correspondents
 Mailed /Telephonic questionnaire method
 Schedules sent through enumerators
In preparing this field work report only direct personal contact and oral interview methods are
used. Data information is collected by making questionnaire.
Secondary Data:
The data are collect from the published and unpublished sources. Secondary data are those
data which are already available and have been collected for some other purpose.
 Annual financial reports of Shree Investment & Finance Company Limited.

 Official website of SIFCO
 Newspaper
 Various research papers
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 Books and articles

Population and Sample:
The size of population is defined. So, a total of 50 questionnaires are distributed among
employees, investors, Board of director and company secretary and CEO. The questionnaires
are mixed questions such as ranking and multiple choices. Five questions were about
respondent profile and demographic information.
1.8.4 Data Presentation and Analysis Tool
Various statistical as well as financial ratios are used in analysis of data obtained in the due
course of research. The obtained data is presented, tabulated and graphed and subsequently
done the same to the results computed to analyze and achieve the goal of the study. The
following tools which are used for data analysis.
 Liquidity ratios
 Profitability ratios
 Leverage Ratios
 Activity ratios
 Other financial ratios
Further, following tools have been used for data presentation:
 Tabulation
 Line Charts
 Pie charts
 Bar diagrams
A) Ratio Analysis
A ratio is simply one number expressed in terms of another and on such it express the
quantitative relationship between any two numbers. Ratio can be expressed in terms of
percentage, proportion and as a coefficient.
Liquidity Ratio
Liquidity ratios are used measure a firm's ability to meet short-terms obligations. They
compare short terms obligations to short-term (current) resources available to meet these
obligations. From these ratios, much insight can be obtained into the present cash solvency of
the firm and the firm's ability to remain solvent in the event of the adversity. Following ratios
have been evaluated under liquidity ratio
Current Ratio
It measures the short-term solvency position of firm by the current assets. It is derived by
dividing current assets by current liabilities as follows:
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Current Ratio = __Current Assets_

Current Liabilities
Current assets are those assets that can be converted into cash within a year, such as cash &
bank balance, Investment, Debtors, Inventories, Prepaid expenses, Money at call and short
notice, Overdrafts etc. While current liabilities are the short term liabilities.
Generally, higher current ratio indicates better liquidity position and 2:1 or more is
considered satisfactory.
Cash and Bank Balance to Total Deposit Ratio

This ratio shows the percentage of liquid assets held as compared to the total deposit. High
ratio shows the strong liquidity position of the Finance company. It can be calculated as
follows:
Cash and Bank Balance to Current Assets Ratio = Cash and Bank Balance
Total Deposits
The total deposit consists of current deposit, savings deposit, fixed deposit, money at call and
short notice and other deposits. This ratio is calculated as:
Cash and Bank Balance to Current Assets Ratio

Cash & Bank balance is the most liquid form of current assets. This ratio measures the
proportion of cash and bank balance held by the Finance company. Current assets includes:
Cash & Bank balance, Money at call and short notice, Loans and Advances including, Bill
discounted and Purchased, Investments in government securities and other securities,
Interests receivable and miscellaneous current assets shown under used head other assets.
Cash and bank balance to current assets ratio is calculated as follows:
Current Assets
Cash and Bank Balance to Current Deposit Ratio
This ratio measures the ability of Finance company's current assets to fulfill the current
deposit. High level of liquidity is not good as idle assets earn nothing. This ratio is calculated
as under:
Cash and Bank Balance to Current Deposit Ratio= Total Cash and Bank Balance
Current Deposit Ratio
Loans and Advance to Total Deposit Ratio (Credit Deposit Ratio)
The credit to Deposit ratio is one of the most commonly used ratio for liquidity of BFIS. It
indicates the ratio of loan and advances with the total deposit and core capital of the Finance
company. In other words, this ratio measures the Finance company’s ability to utilize the
12
amount that has been collected through saving, current & fixed deposit account. CD ratio can
be calculated as follows:
Loans and Advance to Total Deposit Ratio= _Loans and Advances___

Total Deposit+ Core Capital
Fixed Deposit to Total Deposit Ratio
Fixed deposit is the high interest bearing deposit and can be withdrawn only after its
maturity. This ratio is calculated in order to find out the proportion of fixed deposit with
respect to the total deposit. It can be calculated as:
Fixed Deposit to Total Deposit Ratio = Fixed Deposit

Total Deposit
Saving Deposit to Total Deposit Ratio
Saving deposit stand midway between current and fixed deposit. These deposits are not as
freely withdrawal as current deposit and are interests bearing. It can be calculated by dividing
the amount of saving deposits by the amount of total deposit, which is presented as:
Saving Deposit to Total Deposit = Saving Deposit

Total Deposit
Profitability Ratio
Profitability ratio measures the efficiency and searches the degree of success in achieving
desired profit. Any firm should earn satisfactory profit to survive and grow over a long period
in the competitive environment profitability ratio can be determined on the basis of either
sales investment.
It measures the efficiency and searches the degree of success in achieving desired profit.
Moreover, such ratios enable an investor to decide whether to invest or not. Some of the
important profitability ratio have been calculated and interpreted in this study which is
presented below:
Net Profit to Total Assets Ratio

This ratio measure the firm's ability to earn profit on total assets invested. It measures the
return on assets. The higher rate of return is considered good and vice-versa. This ratio can be
calculated as follows:
Net Profit to Total Assets Ratio= Net Profit after Tax

Total Assets
Net Profit to Total Deposit Ratio
It is used for measuring the internal rate of return from deposits. Here, net profit means profit
after tax and total deposits including savings, current, fixed, call, margin and other deposits.
Higher ratio indicates the return from investment on loan and advances are better utilized and
mobilized. It is computed by dividing the net profit by total deposit.
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14
Net Profit to Total Deposit Ratio= Net Profit after Tax

Total Deposit
Return on Shareholders' Equity
It is the most vital to judge whether a concern has earned a satisfactory return to its owner or
not. Here, return refers to net profit after tax. This ratio is expressed by dividing net profit
after tax to ordinary shareholder's equity.
Return on Shareholders’ Equity= Net Profit after Tax

Shareholders’ Equity
Return on Investment
Return on investment measures the company's return from investment or the capacity to
generate profit from its investment. It can be computed by dividing net profit after tax to total
investment.
Return on Investment= Net Profit after Tax

Total Investment
Earnings per Share (EPS)
It measures the profit available to the common shareholders as per share basis i.e. the amount
they get from every share. This division will automatically after the earning per share. The
earnings per share is calculated by dividing net profit after tax by the total number of
outstanding shares.
Earnings per Share (EPS): = Net Profit after Tax X 100%

Number of Share
Dividend per Share (DPS)
Dividend is that part of earning which is distributed to shareholders as a price of their
investment in common stock, either as investment or cash. The total amount of dividend out
of earning available to the shareholders which is distributed the common stock’s portion is
said dividend per share. Thus, dividend per share is computed by dividing the total amount of
dividend paid by the no. of outstanding share.
Dividend per Share (DPS): = Dividend Paid to Shareholders X 100%

Number of Share
PE Ratio
The price-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its
current share price relative to its per-share earnings. The price-earnings ratio is also
sometimes known as the price multiplier or the earnings multiple. It can be measured by the
given formula below:
PE Ratio = Market Value per Share

Earnings per Share
15
Leverage Ratio
Leverage ratio is known as capital structure ratio or solvency ratio. It is calculated to measure
the long term financial position of a firm. Leverage ratio measures the overall financial risk
as well the ability of the Finance company in using debt for the benefit for the shareholders.
Thus, there should be appropriate mix of debt and owners' equity in financing the firm's
assets. Debt and equity are long-term obligation. This ratio indicates the fund provided by
owners & creditors. To find out the long solvency of the Finance company, several ratio are
calculated. This ratio helps to find out the proportions of outsiders fund and owners fund.
Long Term Debt to Shareholders’ Fund Ratio

Long-term debt means total amount of fixed deposit and loan from Finance company and
shareholders fund consists of general reserve, share premium other reserves, general loans,
loss provision, retained earnings and proposed capitalization. The ratio shows the proportion
of outside long-term liabilities to shareholder's total funds. The ratio can be calculated by
using following formula:
Long Term Debt to Shareholders’ Fund Ratio= Total Long Term Debt+ Fixed
Deposit
Shareholders’ Fund
Total Long Term Debt to Total Assets Ratio
This ratio implies Finance company's success in exploiting debts to be more as well as its
riskier capital structure. For the requirement fund to the firm the management should finance
the proper mix of fund from the debt and others. This ratio is calculated as under:
Total Long Term Debt to Total Assets Ratio= Total Long Term Debt
Total Assets
Activity Ratio
Activity ratio measures efficiency of an organization from various angles of its operations.
This ratio indicates the efficiency of activity of an enterprise to utilize available funds,
particularly short-term funds. These ratios are used to determine the efficiency, quality and
the contribution of loans and advances in the total profitability. The following activity ratios
measure the performance, efficiency of an organization to utilize its short-term funds.
Total Investment to Total Deposit Ratio

This ratio indicates the efficiency by which the resources of the Finance company have been
utilized. High ratio shows the managerial efficiency regarding the utilization of deposit and
vice-versa. This ratio can be calculated as follows:
Total Investment to Total Deposit Ratio= Total Investment

Total Deposit
16
Loan and Advances to Total Deposit Ratio

This ratio indicates the proportion of total deposit investment in loan and advances. Higher
ratio indicates the proper use of total deposit whereas lower ratio indicates less use of deposit
or idle cash. The ratio is calculated as:
Loan and Advances to Total Deposit Ratio= Total Loan and Advances
Total Deposit
Non-performing Loans to Loans and Advances Ratio
This ratio indicates the percentage of non-performing loans out of total loans and advances.
Higher ratio shows the inefficiency of the Finance company in lending and vice-versa. The
ratio is calculated as:
Non-Performing Loans to Loans and Advances Ratio= Total Non- Performing Loans
Total Loans and Advances
Loans and Advances to Fixed Deposit Ratio
This ratio indicates the utilization of fixed deposit in loans and advances. High ratio shows
the efficiency in utilization of fixed deposit amount in loan and advances and vice-versa. This
ratio can be calculated as follows:
Loans and Advances to Fixed Deposit Ratio= Total Loans and Advances
Total Fixed Deposit
This ratio indicates the percentage of Provision for loan loss out of total loans and advances.
The loan loss provision is made on the total outstanding loans as per the Directives issued by
Nepal Rastra Bank. This ratio can be calculated as follows:
Loan Loss Provision to Total Loans= Total Loan Loss Provision

Net Interest Rate Spread
The net interest rate spread is the difference between the average yield a financial
institution receives from loans and other interest-accruing activities and the average rate it
pays on deposits and borrowings. The net interest rate spread is a key determinant of a
financial institution’s profitability (or lack thereof).
Net Interest Rate Spread= Interest Income - Interest Expense

Interest Earning Items Interest Bearing
Liabilities
17
B) Statistical tools
Mean
The statistical mean refers to the mean or average that is used to derive the central tendency
of the data in question. It is determining by adding all the data points in a population and then
dividing by total number of points. It can be calculated as:
∑X
Mean X=
N
Standard Deviation
Standard deviation is a statistic used as a measure of the dispersion in a distribution, equal to
the square root of the arithmetic mean of the squares of the deviations from the arithmetic
mean. It can be calculated as:
∑ ( X−mean X ) 2
S.D=
√ N
Coefficient of Variance
It is a standardized measure of dispersion of a profitability distribution. It is often expressed
as a percentage, and is defined as the ratio of the standard deviation to the mean. It can be
calculated as:
S. D
CV=
mean X
1.9 Limitation of the study
Limitation is the boundary line of the study which narrows the area of study into a specific
circumstance. The major limitations of this study are mentioned below:
 The Research is based on records of three years fiscal years’ analysis only i.e. from
FY 2072/2073 to FY 2074/2075.
 The researcher has used only some statistical tools for presentation and analysis of
data.
 Most of the data used in this study are based on secondary sources mainly official
website of Shree Investment & Finance Company Limited.
 The main focus is given to the quantitative aspect rather than qualitative aspect.
 The data are prepared by the Finance Company so it mainly focused on portfolio
motive.
 The study is based on only Shree Investment & Finance Company Limited.
 It is only for partial fulfillment of Bachelor of Business Studies (BBS).
18
CHAPTER TWO
RESULTS AND ANALYSIS
2.1 Data Presentations
The main purpose of presentation of the financial position and performance according to
research methodology to attain the research objective that includes highlighting the strength
and weakness of M/s Shree Investment & Finance Company Limited. Therefore, this chapter
includes the analysis and result of gathered with a view to assessing financial position and
performance of the Finance Company for the period of three years.
In this chapter, the data are presented and calculated and effort has been made to analyze the
financial statement of the Finance Company for three years. The secondary data is used for
the purpose and for the data presentation of three years (2072/73, to 2074/75).
Analysis of Primary Data

Primary data were collected by means of questionnaire and were focused on the certain
questions so as to analyze the various areas of performance of finance company. A total of 30
questionnaires were distributed among employees, Board of directors, investors and general
public. The questionnaires consisted of 6 mixed questions consisting of multiple choices.
Three questions were about respondent profile
Table 2.1:
Response Rate of Questionnaire
S. No Response Rate
Types of respondents Distributed Returned
No. response (%)
1 Employees 10 9 1 90
2 Board of Directors 3 3 0 100
3 Investors 8 6 2 75
4 General public 9 8 1 89
Total 30 26 4 87
Out of the total 30 questionnaires, 10 were distributed to employees of the organization, 3

were distributed to Board of directors of the organization, 8 for investors and 9 for general
public.
19
Fig 2.1:
Response Rate of Questionnaire
Respondent Profile
General
Public
31% Employees
35%
Investor Board of
23% Director
12%
The pie chart shows the respondent profile. Out of total respondent, majority of respondent
are employees and general public. Response to each of the questionnaire as attached in the
annexure is tabulated as below:
Table 2.2:
Response of the Questionnaires
Option 3 (I
S. Option 1 (Yes) Option 2 (No)
Question don’t know)
No.
Number % Number % Number %
Do you know about the financial
1 position and performance of 23 88.5 3 11.5 - -
SIFCO?
Are there any difficulties in the
2 operation of the Finance 4 15.4 21 80.8 1 3.8
Company?
Does the latest financial statement
3 shows the better position of the 20 76.9 3 11.5 3 11.5
bank?
Do you know if investor assume
4 profitable in investment of 18 69.2 4 15.4 4 15.4
SIFCO?
Are you satisfied with the
5 20 76.9 3 11.5 3 11.5
profitability position of SIFCO?
Do you know about the future
6 16 61.5 10 38.5 - -
programs of the bank?
(Source: Questionnaire Survey)
The detailed diagrammatic representation of the responses of questionnaires are presented in

the figures below:
20
Fig 2.2.1:
Response related with Financial Position and Performance of SIFCO
Number of Respondent
No
12%
Yes
88%
(Source: Response to Survey Questionnaire)
The respondent were asked about whether they were aware of financial position and
performance of the company. Out of total respondent, 88% of the participants were aware of
the financial position and performance of SIFCO.
Fig 2.2.2:
Response related with difficulty in Operation of Finance Company
Don’t know
4% Yes
15%
No
81%
The respondent were asked about whether there are any difficulties in operation of the
Finance Company. Out of total respondent, only 15% of the participants thought that there
were certain difficulties in the operation of Finance Company. 81% of the respondent replied
with "No'" and 4% of them were not aware about it.
21
Fig 2.2.3:
Response related with knowledge of latest financial statement of SIFCO
Don’t know
12%
No
12%
Yes
77%
The respondent were asked about whether the latest financial statement of the company
showed better financial position. Out of total respondent, 77% of the participants thought that
the latest financial statement showed the better position of the Finance Company while 11%
of the respondent opted with "No" and 12% of them were unknown about it.
Fig 2.2.4:
Response related with views on Investors profitability against Investment in SIFCO
Don’t know
15%
No
15%
Yes
69%
The respondent were asked about views on investor's assumption regarding profitability
against investment in SIFCO. Out of total respondent, 69% of the participants thought that
investor would consider it profitable to invest in SIFCO, while 16% were negative on that,
with 16% of participants were uncertain about it.
22
Fig 2.2.5:
Response related with views on satisfaction regarding Profitability of SIFCO
Don’t know
12%
No
12%
Yes
77%
The respondent were asked about whether they were satisfied with the profitability position
of the company. Out of total respondent, 77% of the participants were satisfied with the
profitability position of SIFCO while 12% were negative on that, with 11% of participants
were uncertain about it.
Fig 2.2.6:
Response related with knowledge on Future program of the Company
No
38%
Yes
62%
The respondent were asked about whether they were about the future program of the
company. Out of total respondent, 62% of the participants responded that they were aware
about the future programs of the Finance Company while the remaining 38% responded with
"No".
23
Analysis of Secondary Data

As mentioned in the earlier chapter, following financial ratios are applied to judge the
financial viability of the M/s Shree Investment & Finance Company Limited and the
secondary data are presented as below:
2.1.1 Liquidity Ratio
Current Ratio
It measures the short-term solvency position of firm by the current assets. It is derived by
dividing current assets by current liabilities as follows:
Current Ratio = __Current Assets__

Current Liabilities
Table 2.3:
Current Ratio
Financial Year Current Assets (Rs) Current Liabilities (Rs) Current Ratio
2072/73 1,921,544,110 1,815,670,549 1.06
2073/74 3,859,231,585 3,335,400,618 1.16
2074/75 4,579,290,899 3,719,476,531 1.23
(Sources: Annual Report of Shree Investment & Finance Company Limited)
In context of M/s Shree Investment & Finance Company Limited, though the ratio is less than
2:1, it can be considered satisfactory because Finance Company always have more current
assets. As shown in the above table, the current ratio is highest in the year 2074/75 and
lowest in the year 2072/73. In general it can be said that the Finance Company can fulfill its
current liabilities.
Fig 2.3:
Current Ratio
Current Ratio
Current
ratio

24
Cash & Bank Balance to Total Deposit Ratio

This ratio shows the percentage of liquid assets held as compared to the total deposit. High
ratio shows the strong liquidity position of the Finance Company. It can be calculated as
follows:
Total Deposits
Table 2.4
Cash & Bank Balance to Total Deposit Ratio
Cash and Bank
Financial Year Total Deposit (Rs) Ratio
Balance (Rs)
2072/73 478,595,288 1,815,670,549 0.26
2073/74 1,020,578,544 3,335,400,618 0.31
2074/75 1,012,275,911 3,719,476,531 0.27
The cash and bank balance to total deposit ratio of the Finance Company is highest with 0.31
in FY 73/74 and least in FY 2072/73 with 0.26 only. The Finance Company has least
liquidity position in FY 2072/73. The high ratio also indicates the idle portion of the total
deposit amount which cannot generate income.
Fig 2.4:

Cash and
Bank
Balance
to Total
Deposit
ratio

Cash and bank balances are the most liquid form of the current assets. The cash and bank
balance ratio indicates the percentage of readily fund with in the Finance Company. It can be
calculated as follow:
Current Assets
25
Table 2.5:
Year Cash & Bank Balance (Rs) Current Assets (Rs) Current Ratio
2072/73 478,595,288 1,921,544,110 0.25
2073/74 1,020,578,544 3,859,231,585 0.26
2074/75 1,012,275,911 4,579,290,899 0.22
The cash and bank balance to current assets of the Finance company was maximum & better
with 0.26 in the year 2073/74 and minimum 0.22 in the year 2074/75. All the ratios of the
cash and bank balances are very low. As such, Finance company may not be able to repay its
current obligation by cash and bank balances.
Fig 2.5:
Cash & Bank to Current Assets

Cash &
bank to
current
assets

Cash and Bank balance to Current Deposit Ratio
This ratio measures the ability of banks current assets to fulfill the current deposit. It is
Cash and Bank Balance to Current Deposit Ratio= Total Cash and Bank Balance
Current Deposit Ratio
Table 2.6:
Year Cash & Bank Balance (Rs) Current Deposit (Rs) Ratio
2072/73 478,595,288 629,003,400 0.76
2073/74 1,020,578,544 1,392,411,259 0.73
2074/75 1,012,275,911 1,515,626,905 0.67
26
The bank's cash and bank balance to current deposit ratio is on the higher side. There are
chances of high level of idle assets which earns nothing. The ratio was highest in FY 2072/73
and least in FY 2074/75.
Fig 2.6:
Cash & Bank Balance to Current Deposit

Cash &
Bank
Balance
to
Current
Deposit
Loans and Advance to Total Deposit Ratio
The credit to Deposit ratio is one of the most commonly used ratio for liquidity of BFIS. It
indicates the ratio of loan and advances with the total deposit and core capital of the Finance
Company. CD ratio is calculated as follows:
Loans and Advance to Total Deposit Ratio = Loans and Advances___

Total Deposit+ Core Capital
Table 2.7:
Loans and Advances to Total Deposit Ratio
Financial Loans and Advances Total Deposit+ Core capital
Ratio
Year (Rs) (Rs)
2072/73 1,437,133,390 2,135,670,549 0.67
2073/74 2,814,802,327 3,680,849,488 0.76
2074/75 3,520,285,333 4,519,626,530.59 0.78
The loan and advances to total deposit and core capital ratio of the Bank is at an average of
74% during these three years. It was observed to be the highest in the FY 2074/75 at 78%,
which shows that 78% of the total deposit and core capital has been utilized as loans and
advances. The ratio is continuously on increasing trend, i.e. fund utilization position of bank
is improving.
27
Fig 2.7:
Credit to Deposit+Core Capital Ratio

Credit to
Deposit+c
ore
capital
ratio
The fixed deposit to total deposit ratio is calculated in order to find out the ratio of fixed
deposit as compared to the total deposit. It can be calculated as:
Fixed Deposit to Total Deposit Ratio = Fixed Deposit

Total Deposit
Table 2.8:
Financial Year Fixed Deposit (Rs) Total Deposit (Rs) Ratio

2072/73 1,186,667,149 1,815,670,549 0.65
2073/74 1,942,989,359 3,335,400,618 0.58
2074/75 2,203,849,626 3,719,476,531 0.59
The fixed deposit to total deposit ratio of the Finance company was highest in FY 2072/73 at
65% and least in FY2073/74 at 58%.
Fig 2.8:
Fixed Deposit to Total Deposit
Fixed
Deposit to
Total
Deposit

28
Saving Deposit to Total Deposit
This ratio can be calculated by dividing the amount of saving deposits by the amount of total
deposit, which is presented as:
Saving Deposit to Total Deposit = Saving Deposit

Total Deposit
Table 2.9:
Financial Year Saving Deposit (Rs) Total Deposit (Rs) Ratio (%)
2072/73 629,003,400 1,815,670,549 35
2073/74 1,392,411,259 3,335,400,618 42
2074/5 1,515,626,905 3,719,476,531 41
The saving deposit to total deposit ratio of the Finance company varies from maximum 42%
in the year 2073/74 and minimum 35% in year 2072/73.
Fig 2.9:
Saving
deposit to Saving Deposit to Total Deposit
Total
deposit

29
2.1.2 Profitability Ratio
This ratio measure the firm's ability to earn profit on total assets invested. It measures the
return on assets. The higher rate of return is considered good and vice-versa. This ratio can be
Net Profit to Total Assets Ratio= Net Profit after Tax

Total Assets
Table 2.10:
Net Profit to Total Asset Ratio
Financial Year Net Profit After Tax (Rs) Total Assets (Rs) Ratio (%)
2072/73 30,267,817 2,190,457,756 1.38
2073/74 130,612,366 4,156,982,908 3.14
2074/75 91,769,532 4,952,714,055 1.85

The net profit to total assets ratio of the Finance company are very low in the fiscal year. It
was observed to be least in FY 2072/73 at just 1.38%. The highest return is on FY
2073/74.Finance company should accelerate it speed to increase its profit ratio in the coming
year.
Fig 2.10:
Net Profit to Total assets
Return on
Total
assets
Net Profit to total deposit Ratio measures the internal rate of deposit. Higher ratio indicates
higher return or net profit per unit of the total deposit and vice-versa. It can be calculated as
follows:
30
Net Profit to Total Deposit Ratio= Net Profit after Tax

Total Deposit
Table 2.11:
Financial Year Net Profit After Tax (Rs) Total Deposits (Rs) Ratio (%)
2072/73 30,267,817 1,815,670,549 1.67
2073/74 130,612,366 3,335,400,618 3.92
2074/75 91,769,532 3,719,476,531 2.47
The net profit to total deposit ratio of the Finance company is highest in FY 2073/74 at 3.92%
and lowest in FY 2072/73 at 1.67%.
Fig 2.11:
Net profit to Total deposits

Net profit
to Total
deposits
Return on Shareholder’s Equity
This ratio is measures the return per unit of the shareholders’ equity. Here return refers to the
profit after tax. This ratio is calculated as follows:
Return on Shareholder’s Equity= Net Profit after Tax

Shareholders’ Equity
Table 2.12:
Return on Shareholder's Equity

Shareholder’s equity
Financial Year Net Profit After Tax (Rs) Ratio (%)
(Rs)
2072/73 30,267,817 325,704,812 9.29
2073/74 130,612,366 653,257,740 19.99
31
Shareholder’s equity
Financial Year Net Profit After Tax (Rs) Ratio (%)
(Rs)
2074/75 91,769,532 970,492,481 9.46
The return on shareholders’ equity for Shree Investment and Finance Company Limited is on
the fluctuating trend. It was highest on the FY 2073/74 and least in the FY 2072/73.
Fig 2.12:
Return on
sharehold
er's equity
Return on investment measures the net profit per unit of the investment. The high ratio is
considered as favorable. This ratio is calculated as under:
Return on Investment= Net Profit after Tax

Total Investment
Table 2.13:
Financial Year Net Profit After Tax (Rs) Total Investment (Rs) Ratio
2072/73 30,267,817 98,301,000 0.308
2073/74 130,612,366 131,603,275 0.993
2074/75 91,769,532 185,426,086 0.495
The return on Investment is observed to be highest in the FY 2073/74 at 0.993 and lowest in
the FY 2072/73 at 0.308 only. The return on investment is on decreasing trend except in FY
2073/74, where it has slightly increased as compared to the previous year figure.
32
Fig 2.13:
Return on
Investmen
t
Earnings per Share (EPS)
EPS simply shows the profitability of the firm on a per share basis. It is calculated from the
point of view of the ordinary shareholders.
Earnings per Share (EPS): = Net Profit after Tax X 100

No. of Share
Table 2.14:
Earnings per Share
Financial Year Net Profit After Tax (Rs) No. of Common Share EPS (Rs.)
2072/73 30,267,817 2,200,000 13.76
2073/74 130,612,366 3,454,489 37.81
2074/75 91,769,532 8,001,500 11.47
The EPS trend is fluctuating out, it is clear that the EPS of Shree Investment & Finance
Company Limited is on the decreasing. The EPS is highest in the FY 2073/74 and lowest in
the FY 2074/75.
33
Fig 2.14:
Earnings per Share
Earning Per Share

Earning
per share
Dividend per Share (DPS)
Dividend per share is calculated as below:
Dividend per Share (DPS): = Dividend paid to Shareholders X 100%

No. of Share
Table 2.15
Dividend per Share
Financial Year Dividends (Rs) No. of Common Share DPS (Rs.)

2072/73 1,215,789 2,200,000 0.55
2073/74 - 3,454,489 -
2074/75 70,165,000 8,001,500 8.77
The dividend per share is on the fluctuating side. No dividends were distributed in FY
2073/74 and highest dividend was paid in FY 2074/75 with Rs. 8.77 per share.
Fig 2.15
Dividend per Share
Dividend Per Share

Dividend
per share

34
Cash Dividend per Share (DPS)
Here, only the cash dividend amount is considered. It calculates the cash dividend per number
of share. It can be calculated as below:
Cash Dividend per Share (DPS): = Cash Dividend paid to Shareholders X 100
No. of share
Table 2.16:
Cash Dividend per Share

Financial Year No. of common Share DPS (Rs.)
(Rs)
2072/73 1,215,789 2,200,000 0.55
2073/74 - 3,454,489 -
2074/75 - 8,001,500 -
Cash dividend per share is on the decreasing trend in the past three years. Cash Dividend was
paid only in FY 2072/73 with Rs. 0.55 per share, while there was no cash dividend in the FY
2073/74.
Fig 2.16:
Cash
dividend
per share

35
Price Earnings Ratio
It can be measured by the given formula below:
PE Ratio = Market Value per Share

Earnings per Share
Table 2.17:

Financial Year Market value per share (Rs) Earnings per share (Rs) PE Ratio
2072/73 311 13.76 22.60
2073/74 383 37.81 10.13
2074/75 383 11.47 33.39
The PE ratio was in fluctuating trend throughout the three years. The highest PE ratio was in
FY 2074/75 at 33.39.
Fig 2.17:
Price Earning Ratio

Price
Earning
Ratio

36
2.1.3 Leverage Ratio
Leverage ratio is also called structure ratio. It is called the solvency ratio as well. It is
calculated to measure the long-term financial position of a firm, debt & equity. Following
leverage ratios have been calculated:
This ratio calculates the ratio of total amount of fixed deposit and long-term bank loan to that
of shareholders fund. This ratio is calculated as under:
Long Term Debt to Shareholders’ Fund Ratio= Total Long Term Debt+ Fixed
Deposit
Shareholders’ Fund
Table 2.18:

Long term debt+ fixed
Financial Year Shareholders’ Fund (Rs) Ratio
deposit (Rs)
2072/73 1,186,667,149 325,704,813 3.64
2073/74 2,022,989,359.43 653,257,740 3.10
2074/75 2,303,849,625.73 970,492,481 2.37
The long term debt to shareholders’ fund is highest in the FY 2072/73 at 3.64. Since then, the
ratio has been decreasing.
Fig 2.18:
Long Term Debt to Shareholder's Fund Long term

debt to
sharehold
er's fund
Total Long Term Debt to Total Assets Ratio
The long term debt to total assets ratio of Shree Investment & Finance Company Limited for
the past three years have been calculated as under:
37
Total Long Term Debt to Total Assets Ratio= Total Long Term Debt
Total Assets
Table 2.19:
Total Debt to Total Assets Ratio

Long Term Debt+ Fixed Deposit
Financial Year Total Assets (Rs) Ratio
(Rs)
2072/73 1,186,667,149 2,190,457,756 0.54
2073/74 2,022,989,359.43 4,156,982,908 0.49
2074/75 2,303,849,625.73 4,952,714,055 0.47
The ratio is in decreasing trend. It was highest in the FY 2072/73 with the ratio of 0.54 and
lowest in the FY 2074/75 with the ratio of 0.47.
Fig 2.19:
Total Debt to Total Assets Ratio
Total Long Term Debt to Total Assets
2.1.4 Activity Ratio
It measures efficiency of an organization from various angles of its operations. It indicates

the efficiency of activity of an enterprise to the utilization of the available funds. The
following ratios measure the performance efficiency of an organization to utilize the available
funds.
Investment to Deposit
This ratio indicates the efficiency by which the deposit obtained by the finance company has
been utilized. This ratio can be calculated as follows:
Total Investment to Total Deposit Ratio= Total Investment

Total Deposit
38
Table 2.20:
Financial Year Total Investment (Rs) Total Deposit (Rs) Ratio (%)
2072/73 98,301,000 1,815,670,549 5.41
2073/74 131,603,275 3,335,400,618 3.95
2074/75 185,426,086 3,719,476,531 4.99
The ratio was highest in the year 2072/73 at 5.41%.
Fig 2.20:
Total Investment to Total Deposit Total

investmen
t to Total
Deposit
Loan and Advances to Total Deposit Ratio
This ratio indicates the amount of loans advance utilized per unit of the total deposit. This
ratio is determined as under:
Loan and Advances to Total Deposit Ratio= Total Loan and Advances
Total Deposit
Table 2.21:
Financial Year Loan and Advances (Rs) Total Deposit (Rs) Ratio (%)
2072/73 1,437,133,390 1,815,670,549 79.15
2073/74 2,814,802,327 3,335,400,618 84.39
2074/75 3,520,285,333 3,719,476,531 94.64
39
Loans and advances to total deposit ratio of SIFCO is in the increasing trend. The ratio was at
79.15% in the FY 2072/73 while it is at 94.64% in the FY 2074/75.
Fig 2.21:
Loans and Advances to Total Deposit

Loans and
advances
to total
deposit
Non-performing Loans to Loans and Advances Ratio
This ratio indicates the position of the non-performing loans as compared to that of the total
loans and advances. This ratio is calculated as follows:
Non-performing Loans to Loans and Advances Ratio= Total Non- performing Loans
Table 2.22:
Non-Performing Loan to Loan & Advances Ratio

Financial
Non- performing loans (Rs) Loan and advances (Rs) Ratio (%)
Year
2072/73 1,224,481 1,437,133,390 0.09
2073/74 7,176,224 2,814,802,327 0.25
2074/75 6,118,806 3,520,285,333 0.17
The ratio of non-performing loans and advances to total loans and advances is generally
observed to on the very lower side.
40
Fig 2.22:
Non-Performing Loan to Loan & Advances Ratio
Non-Performing Loans to Total Loans

Non-
performin
g loans to
total
loans
Loans and Advances to Fixed Deposit Ratio
The loans and advances to fixed deposit ratio of SIFCO for the past three years have been
shown as below:
Loans and Advances to Fixed Deposit Ratio= Total Loans and Advances
Total Fixed Deposit
Table 2.23:
Loan & Advances to Fixed Deposit Ratio
Financial Year Loan and Advances (Rs) Fixed Deposit (Rs) Ratio
2072/73 1,437,133,390 1,186,667,149 1.21
2073/74 2,814,802,327 1,942,989,359 1.45
2074/75 3,520,285,333 2,203,849,626 1.60
The table shows that the loan and advances of SIFCO is on fluctuating trend. However, the
ratio is on higher side. So, it shows the bank's efficiency and better performance.
41
Graph 2.23:
Loan & Advances to Fixed Deposit Ratio
Loans and Advances to Fixed Deposit

Loans and
advances
to fixed
deposit
This ratio indicates the percentage of Provision for loan loss out of total loans and advances.
The loan loss provision is made on the total outstanding loans as per the Directives issued by
Nepal Rastra Bank. This ratio can be calculated as follows:
Loan Loss Provision to Total Loans= Total Loan Loss Provision

Table 2.24:
Loan Loss Provision to Total Loans and Advances Ratio

Financial
Loan Loss Provision (Rs) Loan and Advances (Rs) Ratio (%)
Year
2072/73 15,767,500 1,437,133,390 1.10
2073/74 36,336,018 2,814,802,327 1.29
2074/75 41,892,277 3,520,285,333 1.19
The ratio of loan loss provision to total loans and advances is on the lower side. Minimum of
1% of the total outstanding loan is as prescribed by the NRB Directive. Lower ratios as
shown above indicate the better position of loans and advances.
42
Fig 2.24:
Loan Loss Provision to Total Loans and Advances Ratio
Loan Loss Provision to Total Loan and Advances
Loan loss
provision
to total
loan and
advances
The net interest rate spread is a key determinant of a financial institution’s profitability
position. The greater the spread, the more profitable the financial institution is likely to be;
the lower the spread, the less profitable the institution is likely to be. Net interest rate spread
for three years have been calculated as below:
Net Interest Rate Spread= Interest Income - Interest

Expense____
Interest Earning Items Interest Bearing
Liabilities
Table 2.25:
Interest Net Interest

Financial
Earning Items Bearing Rate Spread
Year Income (Rs) Expense (Rs)
(Rs) Liabilities (Rs) (%)
2072/73 184,424,706 2,008,410,114 119,223,992 1,815,670,549 2.62
2073/74 331,830,052 3,918,739,802 199,218,685 3,415,400,618 2.63
2074/75 507,621,391 4,666,603,264 319,900,835 3,819,476,530 2.50
The Net Interest rate spread was fluctuating between the three years period. The highest
interest rate spread was in the FY 2073/74 at 2.63%.
43
Graph 2.25:

Net
Interest
Rate
Spread
2.2 Statistical Analysis
The data produced above for the relation between cash and bank balance and total deposit are
analyzed with the calculation of the mean, standard deviation, coefficient of variation
Table 2.26:
Calculation of Standard Deviation of Cash & Balance & Deposit
Amount in Rs '000
Financial Cash & Bank Balance
Total Deposit (Y) X'= (X-A)2 Y'= (Y-B)2
Year (X)
2072/73 479 1,816 128,164 1,301,881
2073/74 1,021 3,335 33,856 142,884
2074/75 1,012 3,719 30,625 580,664
Total 0 0 0 0
Sources: Annual Report of Shree Investment & Finance Company Limited
2.2.1 Mean
Mean does the number of the value divide the sum of all the observation. Means is the
arithmetic average of total observation or values.
Mean (X') = ΣX
N
Average Cash and Bank Balance (A) = ΣX = 2,512 = 837
N 3
Average Total Deposit (B) = ΣY = 8,870 = 2,957
44
N 3
Therefore the average of the Cash & Bank Balance (CBB) of SIFCO for the last three years is
Rs. 837 million and the average of the Total Deposit (TD) of the bank is Rs. 2,957 million.
2.2.2 Standard Deviation
Standard Deviation is used to measure the risk of company.
SD = Σ(X-mean X) 2
N
SD of CBB (σ) = 192,645 = 64,214 = 253.4

3
SD of TD (σ) = 2,025,429 = 675,143 = 821.67

3
Therefore, the SD based on CBB of SIFCO for last three year is Rs.253.4 million and SD of
TD is Rs. 821.67 million.
2.2.3 Coefficient of Variation (CV)
The coefficient of dispersion based on standard deviation multiplied by 100 is known as

coefficient of variation. It is independent unit.
CV = σ
Mean
CV of CBB = σ of CBB *100% = 253.4 *100% = 30.27%

A 837
CV of TD = σ of TD *100% = 821.67 *100% = 27.79%

B 2,957
The coefficient of variation measures the variability of the observation with reference to the
mean of the above data. There is more uniformity in the changes of total deposit as compared
to the cash and bank balances because CV of TD is less than CV of CBB i.e.
27.79%<30.27%.
45
46
CHAPTER THREE
SUMMARY AND CONCLUSION
This chapter is dedicated to provide conclusions after tabulation and analysis of the different
financial ratios as depicted in the earlier chapters on the financial performance and position of
Shree Investment and Finance Company Limited. It also tries to provide some
recommendations to the concerned banks from the conclusion derived from the study.
3.1 Summary
Banks and financial institutions generally mobilize the idle resources by collecting from
general public in the form of deposits and disbursing the collected deposits in the form of
loan to parties requiring it and generating profits in the same process. Absence of modern
banking system leads to lack of sufficient capital. Thus, any country cannot have a developed
economy in the absence of modern banking system. An effective banking system leads to the
effective mobilization of resources like saving and investments, which in turn leads to sound
economic growth of the country.
Ratio analysis is a very significant tool to financial performance analysis. It is one of the
means by which financial stability, wealth, viability and performance of a firm can be judged.
This project report has been prepared for the fulfillment of the internal assessment of BBS
program. From this purpose, here we have analyzed the financial performance of Shree
Investment and Finance Company Limited over the period of FY 2072/73 to FY 2074/75. To
evaluate the financial performance of the finance company, we have divided the whole report
to different chapters. In every chapter, there are several sub-chapters. The first Introduction
chapter gives background information about the project work, introduction of Shree
Investment and Finance Company Limited, Review related studies etc. The second chapter
called Presentation and Analysis of Data; we tried to analyze its financial performance
through Ratio Analysis. By using this financial tool, we computed different ratios to evaluate
its Liquidity position, Profitability Position and overall Financial Position.
In summary, it has been found that the profit of Shree Investment and Finance Company
Limited is growing at higher rate, depicting the better performance of the bank with each
year. Hence, it is utterly important to find out whether or not the banks are serving as an
importance contribution towards the development of the different sector of the economy.
The major findings of the study are as follows:
 From the study, it has been found out that the overall financial position and performance
of Shree Investment and Finance Company Limited is satisfactory and better than other
finance companies of the same level
47
 From the calculation of the liquidity ratios, it has been observed that the overall liquidity
of the bank is satisfactory. The company is fairly in position to its meet short-term
obligations and further the bank has been increasing its short-term solvency power for
short-term liabilities from current assets. The Credit deposit ratio of the finance is also
satisfactory. However, the cash to current assets ratio though positive, is on the lower
and decreasing order.
 From the profitability ratios, it has been observed that the earning of the bank is
fluctuating.
 From the Leverage Ratio, it has been observed that the bank has taken some long-term
loans from other banks. All the same, the financial structure of the company is observed
to be satisfactory.
 From the Activity Ratio, it has been observed that the bank has under-utilized its deposits
in the productive sector. The bank has invested very few percent of available funds to
generate income.
3.2 Conclusion
Finance Company is a very important and vital for economic development in mobilizing
capital and other resources. SIFCO is also contributing to the advancement of the
socioeconomic condition of the country. With increasing globalization and development
activities rapidly progressing with increased competition in the banking industry, SIFCO is
following several strategies and taking new initiatives, offering new products and services to
the customers.
From the above findings, it has been concluded that the finance company is in profitable
condition in the past years. Similarly, it can be concluded from the leverage ratios calculated
that the financial structure of the bank is satisfactory. Further, it can also be concluded that
the utilization of the available funds is satisfactory.
In a nutshell, it can be concluded that the overall financial position and performance of
SIFCO is in satisfactory condition. Though there appears to be the instances wherein the
chances for performing better exist, the overall business position of the bank is very good as
compared to the other finance company of similar level.
SIFCO is one of the popular finance company and it may be one of the leading finance in the
Nepalese finance sector. So, it needs to spread in branches in remote area of the country. A
strategy sector should be directed for better performance to ensure long-term survival and
sustainability.
Following points may help SIFCO to perform well in the future considering that the bank
right now is in the developing and extension stage of its age. Mentioned below are the
recommendations suggested to overcome the weakness and inefficiency and to improve the
financial performance of the bank:
48
 Considering the present economic condition of the country, the finance company should
play vital roles for the development of the country. They should promote balanced
original development by financing funds in remote areas and other priority sectors.
 The finance company should extend its services in multiple parts of the area. The bank
has only few branches, which increases chances of losing customers especially in the
increasing market condition.
 In order to be able to pay the liabilities the bank should have to increase their current
assets by investing in marketable securities because their current ratios are less than the
conventional standard 2:1 ratio.
 The cash and cash equivalent to current assets is very low in ratio. It is recommended to
increase the balance to be able to meet quick liabilities, maintain the quick ratio at the
range of 1:1.
 Other than shareholders annual report, the bank should publish and distribute booklets
containing department information about its activities and performance as well.
 For the better utilization of Shareholders fund, the bank should conduct research
frequently.
 Obtaining more funds with cost return analysis, and their subsequent utilization in the
assets.
 Loans Programs should be made attractive to increase the loan portfolio, since the major
income source is the interest income from the loans and advances provided.
 Financing more agricultural, manufacturing and small scale industries sectors.
 The bank needs to adopt new technologies, which is very helpful to work effectively and
efficiency.
 Pay special attention towards staff management.
 The risk of return on equity should be reduced.
49
BIBLIOGRAPHY
Ahmed, M., B.(2009). “Measuring the Performance of Islamic Banks by Adapting

Conventional Ratios German University in Cairo Faculty of Management
Technology”, Working Paper No. 16 pp 1-26
Almumani (2014). “Evaluating the Financial Performance of Banks Using Financial Ratios-
A Case Study of Erbil Bank for Investment and Finance “, European Journal of
Accounting Auditing and Finance Research, Volume 2, pp162-177
Haque, I. (2011). “Comparative Study between Public Sector Banks & Private Sector
Banks”, International Journal of Management & Innovation.
Hannan, A.S. and Shaheed, A. (1998). “Financial Position and Performance analysis of
Bangladesh Shilpa Bank, Islamic University Studies”, Volume-1, June 1998.
Kiyota, H. (2009). “Efficiency of Commercial Banks in Sub-Saharan Africa: A Comparative
Analysis of Domestic and Foreign Banks”, A paper prepared for the CSAE conference
2009 on “Economic Development in Africa” held at the University of Oxford.
Kumbirai and Webb, (2010). “African Review of Econiomics and finance”, Volume 2, No-1,
Rhodes University, Grahamstown, South Africa
O’Donnell, C.J. and van der Westhuizen, G. (2002). Regional comparisons of banking
performance in South Africa. The South African Journal of Economics 70 (3), pp 485-
518.
Peterson P. and Fabozzi F. (1999). “Analysis of the financial statements”, Volume 54 of F. J.
Fabozzi series, Publishers: John wiley & Sons.
Samad, A. (2004). Bahrain Commercial Bank’s Performance during 1994-2001. Credit and
Financial Management Review 10(1) pp 33-40.
Sinha G. (2007). “Financial Statement Analysis”, India
Other Reference:
Shree Investment & Finance Company Limited (2072//73 to 2074/75) Annual and Audited
Financial Report.
Website: https://www.shreefinance.com.np/
50
APPENDICES
Appendix 1: Comparative Balance Sheet of Last Five Years
Particulars 2070/71 2071/72 2072/73 2073/74 2074/75

Capital and Liabilities
Share Capital 197,120,000 220,000,000 243,100,000 513,427,438 810,000,000
Reserve and Funds 70,548,320 76,652,784 82,604,812 139,830,302 160,492,481
Debenture and Bonds - - - - -
Borrowings - - - 80,000,000 100,000,000
Deposit Liability 1,619,827,947 1,605,642,911 1,815,670,549 3,335,400,618 3,719,476,531
Bills Payable - - - - -
Proposed Cash Dividend 1,111,579 1,204,211 1,215,789 - 70,165,000
Income Tax Liability - - 211,371 - -
Other Liabilities 56,392,391 55,977,082 47,655,234 88,324,550 92,580,043
Total Capital and Liabilities 1,945,000,237 1,959,476,989 2,190,457,756 4,156,982,908 4,952,714,055
Assets
Cash Balance 7,805,767 4,188,645 5,619,564 48,244,345 51,384,066
Balance with NRB 47,722,062 41,746,094 54,542,505 68,228,186 86,781,336
Balance with Bank and Financial Institution 412,405,384 528,186,246 472,975,724 972,334,199 960,891,845
Money at Call and Short Notice - - - - -
Investments 68,268,230 58,172,930 98,301,000 131,603,275 185,426,086
Loans Advances and Bill Purchase 1,281,599,303 1,203,545,733 1,437,133,390 2,814,802,327 3,520,285,333
Fixed Assets 119,833,127 117,467,377 116,070,140 97,919,862 101,215,734
Non-Banking Assets - - - - -
Other Assets 7,366,363 6,169,963 5,815,432 23,850,714 46,729,655
Total Assets 1,945,000,237 1,959,476,989 2,190,457,756 4,156,982,908 4,952,714,055
51
Appendix 2: Comparative Statement of Profit & Loss of Last Five Years
Particulars 2070/71 2071/72 2072/73 2073/74 2074/75

Interest Income 197,690,908 185,993,415 184,424,706 331,830,052 507,621,391
Interest Expense 134,700,265 117,495,654 119,223,992 199,218,685 319,900,835
Net Interest Income 62,990,643 68,497,761 65,200,714 132,611,367 187,720,556
Commission and Discount 17,033 17,269 10,460 638,773 1,377,116
Other Operating Income 13,891,154 11,347,278 14,269,368 19,511,289 40,092,171
Exchange fluctuation income - - - - -
Total operating Income 76,898,830 79,862,309 79,480,542 152,761,429 229,189,843
Employee Expenses 17,951,973 19,068,671 16,220,432 34,248,833 38,830,734
Other Operating Expenses 15,091,183 14,391,061 14,717,135 27,631,030 37,162,551
Exchange fluctuation loss - - - - -
Operating Profit Before Provision for Possible Loss 43,855,674 46,402,577 48,542,974 90,881,566 153,196,558
Provision for possible Losses 497,857 321,217 2,759,569 4,650,922 14,207,689
Operating Profit 43,357,817 46,081,360 45,783,405 86,230,644 138,988,869
Non-operating Income/Expense 127,053 169,404 638,060 116,639,363 3,307,577
Provision Written-Back 610,814 1,150,001 1,093,246 2,710,366 2,380,379
Profit from Regular Operation 44,095,684 47,400,765 47,514,711 205,580,373 144,676,825
Profit/Loss from extra-ordinary activities - - - - -
Net Profit after considering all activities 44,095,684 47,400,765 47,514,711 205,580,373 144,676,825
Provision for Staff Bonus 4,008,699 4,309,160 4,319,519.16 18,689,125 14,467,682
Provision for Income Tax 12,272,494 12,902,930 12,927,375 56,278,882 38,439,610
A. This Year's 11,889,396 12,964,148 12,957,827 58,109,567 39,272,405
B. Previous Year's 251,169 - - - 471,263
C. Deferred Tax Expense/(Income) 131,929 (61,218) (30,452) (1,830,685) (1,304,058)
Net Profit/ (Loss) 27,814,492 30,188,675 30,267,817 130,612,366 91,769,532
52
Questionnaire
Section 1: Personal details

Name of Respondent:
Job Position:
Age:
Address:
Contact number (optional):
Section2:
1. Do you know about the financial position and performance of SIFCO?
a) Yes
b) No
2. Are there any difficulties in the operation of the Finance Company?

a) Yes
b) No
c) I don’t know
3. Does the latest financial statement shows the better position of the Finance Company?
a) Yes
b) No
c) I don’t know
4. Do you know if investor assume profitable in investment of SIFCO?
a) Yes
b) No
c) I don’t know
5. Are you satisfied with the profitability position of SIFCO?
a) Yes
b) No
c) I don’t know
6. Do you know about the future programs of the Finance Company?
a) Yes
b) No
c) I don’t know

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SHREE INVESTMENT & FINANCE COMPANY LIMITED

A Project Work Report

Shwoyambhu International College

T.U. Regd. No: 7-2-927-188-2015

Symbol No: 9270199

The Faculty of Management

In Partial Fulfillment of the Requirements for the Degree of

BACHELOR OF BUSINESS STUDIES (BBS)

Name of Supervisor: Raju Raut

Dr. Hari Sharan Chakhun Suman Chaudhary

Chairman Research Committee Campus Chief/Principal

I am very much thankful to all the teacher of Swoyambhu International College;

CBB = Cash and Bank Balance

1.1 Background of Study

Financial analysis is the examination of a business from a variety of perspectives in order to

Companies rely on a mixture of owners' equity and debt to finance their operations. A

“Bank is an organization whose principle operation is concerned with accumulation for the

1.2 Profile of organization

Shree Investment & Finance Company Limited

1.2.1 Board of Directors of Shree Investment & Finance Company Limited

The present board members of the finance company are as follows:

Mr. Samson J.B. Rana Director

Mr. Umesh Bhagat Pradhananga Director

Mr. Ram Krishna Sharma Wagle Director

Mr. Mahesh Prasad Adhikari Director

1.2.2 Capital Structure Plan of Bank

1.3 Present Shareholding Pattern of Bank

Particulars Amount in Rs. Million

1.4 Statement of the Problem

a) How well is the financial performance of SIFCO?

1.5 Objective of Study

1.6 Rationale of Study

1.7.1 Theoretical Review

management of Finance company includes resource collection, investment portfolio, loans

1.7.2 Empirical Review

1.7.3 Research Gap

1.8.1 Research Methodology

1.8.2 Research Design

1.8.3 Data Collection

 Direct personal Interview.

 Annual financial reports of Shree Investment & Finance Company Limited.

 Books and articles

1.8.4 Data Presentation and Analysis Tool

Current Ratio = __Current Assets_

Cash and Bank Balance to Total Deposit Ratio

Cash and Bank Balance to Current Assets Ratio

Cash and bank balance to current assets ratio is calculated as follows:

Loans and Advance to Total Deposit Ratio= _Loans and Advances___

Fixed Deposit to Total Deposit Ratio = Fixed Deposit

Saving Deposit to Total Deposit = Saving Deposit

Net Profit to Total Assets Ratio

Net Profit to Total Assets Ratio= Net Profit after Tax

Net Profit to Total Deposit Ratio= Net Profit after Tax

Return on Shareholders’ Equity= Net Profit after Tax

Return on Investment= Net Profit after Tax

Earnings per Share (EPS): = Net Profit after Tax X 100%

Dividend per Share (DPS): = Dividend Paid to Shareholders X 100%

PE Ratio = Market Value per Share

Long Term Debt to Shareholders’ Fund Ratio

Total Investment to Total Deposit Ratio

Total Investment to Total Deposit Ratio= Total Investment

Loan and Advances to Total Deposit Ratio

Current Ratio = Current Assets