Ratio Analysis: 1. Return On Asset Ratio

North Malabar Gramin Bank Kannur
RATIO ANALYSIS
1. Return on asset ratio
Return on asset = profit after tax *100
Total asset
Table 1. (Rs. In, 000s.)
Year Net profit Total asset Return on asset (%)

2004- 172144 10022169 1.72
2005
2005- 95737 12496753 0.77
2006
2006- 176431 15654879 1.13
2007
2007- 104419 19984927 0.52
2008
2008- 41996 24835686 0.17
2009
2009- 114053 29924310 0.38
2010
Return on assets
1.8
1.6
1.4
1.2
Return on assets
1
0.8
0.6
0.4
0.2
0
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
Srinivas Institute of Management Studies (Mangalore University)

Interpretation
This ratio shows the return on assets of bank. Here total assets shows an increasing trend. In
2004-2005 it had a ratio of 1.72% and from there on words it is fluctuating. In the year 2008-
2009 bank had a lowest return of 0.17% and in 2009-2010 it increased to 0.38%.
2. Profit margin ratio
Profit margin ratio = net profit* 100

Total income
Table2.
Year Net profit Total Ratio (%)

income
2004- 172144 916870 18.78
2005
2005- 95737 1022296 9.36
2006
2006- 176431 1332052 13.25
2007
2007- 104419 1594103 6.55
2008
2008- 41996 1903586 2.21
2009
2009- 114053 2401640 4.75
2010

Profit margin ratio

20
18
16
14
12 Profit margin ratio
10
8
6
4
2
0
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
Interpretation
This ratio shows the profit margin earned by the bank. Profit margin ratio shows a fluctuating
trend. In 2004-2005 it had a ratio of 18.78% and from there on words it is fluctuating. In the year
2008-2009 bank had a lowest return of 2.21 and in 2009-2010 it increased to 4.75
3. Proprietury ratio
Proprietary ratio= share capital + research and surplus
Total asset
Table 3.
Year Share capital Reserves and surplus Total asset Ratio

2004- 10000 1133635 10022169 11.41
2005
2005- 10000 1224578 12496753 9.88
2006
2006- 10000 1412660 15654879 9.09
2007
2007- 10000 1507963 19984927 7.59
2008

2008- 10000 1549959 24835686 6.28

2009
2009- 10000 1664012 29924310 5.59
2010
proprietory ratio
12
10
8
proprietory ratio
6
0
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
Interpretation
Share capital of the bank is fixed during this period. Reserves & surplus shows an increasing
trend and the ratio is decreasing in this period. Now the ratio is at 5.59.
4. Profit to spread ratio

Profit to spread ratio= profit *100
Spread
Spread =interest earned- interest paid
Table 4.
Year Interest earned Interest Profit Ratio

paid

2004- 858368 434495 172144 40.61

2005
2005- 959591 509124 95737 21.25
2006
2006- 1238422 680208 176431 31.61
2007
2007- 1493445 1035626 104419 22.81
2008
2008- 1781783 1335235 41996 9.4
2009
2009- 2272493 1577074 114053 16.40
2010
Profit to spread ratio

45
40
35
30
Profit to spread ratio
25
20
15
10
5
0
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
Interpretation
In the year 2004-05 the ratio is maximum. From there onwards it shows a fluctuating trend. In
the year 2008-09 the ratio is lowest, ie 9.4 and it comes to 16.4 in 2009-10. From 2009 onwards
it shows an increasing trend.
5. profit to interest earned
Profit interest earned ratio= profit *100

Interest earned
Table 5.
Year Interest earned Profit Ratio

2004- 858368 172144 20.05
2005
2005- 959591 95737 9.98
2006
2006- 1238422 176431 14.25
2007
2007- 1493445 104419 6.99
2008
2008- 1781783 41996 2.36
2009
2009- 2272493 114053 5.02
2010
Profit to interest earned ratio

25
20
15
Profit to interest earned ratio
10
Interpretation
The ratio is top in the period 2004-05 and it is 20.05. It shows a fluctuating trend. It is very low
in the year 2008-09(2.36). In 2009-10 it is 5.02. in 2010 it shows an increasing trend.

6. Management cost to grows income ratio
Management cost to grows income ratio = management cost*100
Total income
Table 6.
Year Management Total Ratio

cost income
2004- 310231 916870 33.84
2005
2005- 417435 1022296 40.83
2006
2006- 475413 1332052 35.69
2007
2007- 454059 1594103 28.48
2008
2008- 526355 1903586 27.65
2009
2009- 710513 2401640 29.58.
2010
Mangement cost gross incom ratio

45
40
35
30
25
Mangement cost gross incom ratio
20
15
10
5
0
Interpretation

This also shows a fluctuating trend. Gross income is increasing through out the period. It is
lowest in the year 2008-09(27.65) and in the year 2009-10 it is 29.58.
7. Other income to gross income ratio
Other income to gross income ratio = other income
Gross income
Table.7
Year Gross income Other income Ratio

2004- 916870 58502 6.38
2005
2005- 1022296 62705 6.13
2006
2006- 1332052 93630 7.03
2007
2007- 1594103 100658 6.31
2008
2008- 1903586 121803 6.4
2009
2009- 2401640 129147 5.38
2010

Other income to gross income ratio

8
7
6
5
Other income to gross income
4 ratio
3
2
1
0
Interpretation
Ratio is maximum in then year 2006-07 and then it shows a constant increase in ratio. But in
2009-10 it is the lowest only 5.38. here it shows a down ward trend in 2010.
8. Management cost to total expenditure
Management cost to total expenditure ratio= management cost *100
Total expenditure
Table 8.
Year Management Total expenditure Ratio

cost
2004- 310231 744726 41.66
2005
2005- 417435 926559 45.05
2006
2006- 475413 1155621 41.14

2007
2007- 454059 1489684 30.28
2008
2008- 526355 1861590 28.27
2009
2009- 710513 2287587 31.05
2010
Management cost to total expenditure ratio

50
45
40
35
30 Management cost to total
expenditure ratio
25
20
15
10
5
0
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
Interpretation.
In 2005 to 2009 it shows a down ward trend. In 2005 it is maximum ie,45.05 and it is lowest
in the year 2009 ie, 28.27. in 2010 it increases from 28.27 to 31.05.
9. Credit deposit ratio
Credit deposit ratio = total loans and advances*100
Total deposit
Table 9.
Year Loans and advances Total deposit Ratio

2004- 7115935 7254653 98.09

2005
2005- 9064856 8904350 101.8
2006
2006- 11478607 10897833 105.33
2007
2007- 14059044 13855655 101.48
2008
2008- 16055397 17349517 92.54
2009
2009- 20250738 20787175 97.41
2010
Credit doposite ratio

106
104
102
100
98 Credit doposite ratio
96
94
92
90
88
86
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
Interpretation.
Credit deposit ratio is maximum in the year 2007 in the time of depression. It goes to 105.53
in this period. This is lowest in the year 2009 ie, 92.54. and it increases to 97.41 in the year 2010.
10. Interest paid to interest received ratio
Interest paid to interest received ratio =interest paid*100

Interest received
Table 10.
Year Interest earned Interest Ratio

paid
2004- 858368 434495 50.62
2005
2005- 959591 509124 53.06
2006
2006- 1238422 680208 54.93
2007
2007- 1493445 1035626 69.34
2008
2008- 1781783 1335235 74.93
2009
2009- 2272493 1577074 69.4
2010
Interest paid to interest received ratio

80
70
60
50
Interest paid to interest received
40 ratio
30
20
10
0
Interpretation.
Till 2009 it shows an increasing trend . it goes up to 74.93. and in 2010 it goes down up to
69.4. this ratio is very less in the year 2004.

11 .Interest paid on deposit to gross income ratio
Interest paid on deposit to gross income ratio= interest paid on deposits *100
Gross income
Table 11
Year Gross income Interest paid on deposit Ratio

2004- 916870 358483 39.10
2005
2005- 1022296 403364 39.46
2006
2006- 1332052 527619 39.61
2007
2007- 1594103 821506 51.53
2008
2008- 1903586 1058113 55.59
2009
2009- 2401640 1339198 55.76
2010
Interest paid on deposit to gross income ratio

60
50
40
Interest paid on deposit to gross
30 income ratio
20
10
Interpretation.

12. Interest paid on deposit to total expenditure
. Interest paid on deposit to total expenditure = Interest paid on deposits *100
Total expenditure
Table 12
Year Interest paid on deposit Total expenditure Ratio

2004- 358483 744726 48.14
2005
2005- 403364 926559 43.53
2006
2006- 527619 1155621 45.66
2007
2007- 821506 1489684 55.15
2008
2008- 1058113 1861590 56.84
2009
2009- 1339198 2287587 58.54
2010

interest on deposit to total expenditure

60
50
40
interest on deposit to total
expenditure
30
20
10
0
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
13. Interest on advances to gross income ratio
Interest on advances to gross income ratio =Interest in advance *100
Gross income
Table 13.
Year Gross income Interest om Ratio

advances
2004- 916870 714658 77.95
2005
2005- 1022296 812635 79.49
2006
2006- 1332052 1058242 79.44
2007
2007- 1594103 1278213 80.18
2008

2008- 1903586 1481107 77.81

2009
2009- 2401640 1915416 79.75
2010
Interest on advances to gross income ratio

80.5
80
79.5
79
Interest on advances to gross
78.5 income ratio
78
77.5
77
76.5
14. Profit per employee
Profit per employee = net profit
No. of employees
Year Net profit No. of employees `ratio

2004- 172144 982 175299.39
2005
2005- 95737 977 97990.79

2006
2006- 176431 1017 173481.81
2007
2007- 104419 1026 101772.91
2008
2008- 41996 1146 36645.72
2009
2009- 114053 1116 102198.03
2010
Profit per employee

180000
160000
140000
120000
Profit per employee
100000
80000
60000
40000
20000
0
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
15. Cost income efficiency ratio
Cost income efficiency ratio= operating expenses *100

Total income- interest paid
Table 15
Year Interest Total income Operatin Ratio

paid g
expenses
2004- 434495 916870 310231 64.31
2005
2005- 509124 1022296 400379 78.02
2006
2006- 680208 1332052 379476 58.22
2007
2007- 1035626 1594103 408058 73.07
2008
2008- 1335235 1903586 460277 80.98
2009
2009- 1577074 2401640 539518 65.43
2010
Cost income efficiency ratio

90
80
70
60
Cost income efficiency ratio
50
40
30
20
10
0
2004-20052005-20062006-20072007-20082008-20092009-2010

16. Overhead efficiency ratio
Overhead efficiency ratio=non interest income*100
Non interest expenses
Table 16.
Year Non interest income Non interest expenses Ratio

2004- 58502 310231 18.86
2005
2005- 62705 400379 15.66
2006
2006- 93630 379476 24.67
2007
2007- 100658 408058 24.67
2008
2008- 121803 460277 26.46
2009
2009- 129147 539518 23.94
2010

Overhead efficiency ratio

30
25
20
Overhead efficiency ratio
15
10
0
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
17. Cash ratio
Cash ratio=cash & bank balance*100
Deposits
Year Cash & bank balance deposits Ratio

2004- 469977 7254653 6.48
2005
2005- 527845 8904350 5.93
2006
2006- 754936 10897833 6.93
2007
2007- 1138647 13855655 8.22
2008
2008- 889452 17349517 5.13

2009
2009- 1254837 20787175 6.04
2010
Cash ratio
9
8
7
6
Cash ratio
5
4
3
2
1
0
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
18. Return on equity
Return on equity=net profit *100
Share capital+ reserves and surplus
Table 18.
Year Net profit Share capital Reserves and surplus Ratio

2004- 172144 10000 1133635 15.05

2005
2005- 95737 10000 1224578 7.75
2006
2006- 176431 10000 1412660 12.40
2007
2007- 104419 10000 1507963 6.88
2008
2008- 41996 10000 1549959 2.69
2009
2009- 114053 10000 1664012 6.81
2010
Return on equity
16
14
12
10 Return on equity
8
0
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
19. Net non performing asset ratio
Net NPA ratio= net NPA

Net advances
Table 19.
Year Net NPA Net advances Ratio

2004- 316106 7115935 4.44
2005
2005- 279016 9064856 3.08
2006
2006- 231762 11478607 2.02
2007
2007- 238235 14059044 1.69
2008
2008- 459127 16055397 2.86
2009
2009- 540000 20250738 2.67
2010
Net non performing asset ratio

4.5
4
3.5
3
2.5
Net non performing asset ratio
2
1.5
1
0.5
0

20. Net NPA to total asset ratio
Net NPA to total asset ratio= net NPA*100
Total asset
Table 20.
Year Net NPA Total asset Ratio

2004- 316106 10022169 3.15
2005
2005- 279016 12496753 2.23
2006
2006- 231762 15654879 1.48
2007
2007- 238235 19984927 1.19
2008
2008- 459127 24835686 1.85
2009
2009- 540000 29924310 1.81
2010

Net NPA to total asset ratio

3.5
2.5
2
Nett NPA to total asset ratio
1.5
0.5
21. Spread to total asset ratio
Spread to total asset ratio= spread
Total asset
Table 21.
Year Interest earned Interest Total asset Ratio

paid
2004- 858368 434495 10022169 4.23
2005
2005- 959591 509124 12496753 3.6
2006
2006- 1238422 680208 15654879 3.56
2007
2007- 1493445 1035626 19984927 2.29
2008

2008- 1781783 1335235 24835686 1.8

2009
2009- 2272493 1577074 29924310 2.32
2010
Spread to total asset ratio

4.5
4
3.5
3
Spread to total asset ratio
2.5
2
1.5
1
0.5
0
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

Ratio Analysis: 1. Return On Asset Ratio

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North Malabar Gramin Bank Kannur

Year Net profit Total asset Return on asset (%)

Srinivas Institute of Management Studies (Mangalore University)

2. Profit margin ratio

Profit margin ratio = net profit* 100

Year Net profit Total Ratio (%)

Srinivas Institute of Management Studies (Mangalore University)

Profit margin ratio

Proprietary ratio= share capital + research and surplus

Year Share capital Reserves and surplus Total asset Ratio

Srinivas Institute of Management Studies (Mangalore University)

2008- 10000 1549959 24835686 6.28

4. Profit to spread ratio

Spread =interest earned- interest paid

Year Interest earned Interest Profit Ratio

Srinivas Institute of Management Studies (Mangalore University)

2004- 858368 434495 172144 40.61

Profit to spread ratio

5. profit to interest earned

Profit interest earned ratio= profit *100

Srinivas Institute of Management Studies (Mangalore University)

Year Interest earned Profit Ratio

Profit to interest earned ratio

Srinivas Institute of Management Studies (Mangalore University)

6. Management cost to grows income ratio

Management cost to grows income ratio = management cost*100

Year Management Total Ratio

Mangement cost gross incom ratio

Srinivas Institute of Management Studies (Mangalore University)

7. Other income to gross income ratio

Other income to gross income ratio = other income

Year Gross income Other income Ratio

Srinivas Institute of Management Studies (Mangalore University)

Other income to gross income ratio

8. Management cost to total expenditure

Management cost to total expenditure ratio= management cost *100

Year Management Total expenditure Ratio

Srinivas Institute of Management Studies (Mangalore University)

Management cost to total expenditure ratio

9. Credit deposit ratio

Credit deposit ratio = total loans and advances*100

Year Loans and advances Total deposit Ratio

Srinivas Institute of Management Studies (Mangalore University)

Credit doposite ratio

10. Interest paid to interest received ratio

Interest paid to interest received ratio =interest paid*100

Srinivas Institute of Management Studies (Mangalore University)

Year Interest earned Interest Ratio

Interest paid to interest received ratio

Srinivas Institute of Management Studies (Mangalore University)

11 .Interest paid on deposit to gross income ratio

Year Gross income Interest paid on deposit Ratio

Interest paid on deposit to gross income ratio

Srinivas Institute of Management Studies (Mangalore University)

12. Interest paid on deposit to total expenditure

. Interest paid on deposit to total expenditure = Interest paid on deposits *100

Year Interest paid on deposit Total expenditure Ratio

Srinivas Institute of Management Studies (Mangalore University)

interest on deposit to total expenditure

13. Interest on advances to gross income ratio

Interest on advances to gross income ratio =Interest in advance *100

Year Gross income Interest om Ratio