LIQUIDITY AND PROFITABILITY ANALYSIS OF NIC ASIA

Semester Project Proposal of Business Research Method

Sixth Semester
Bachelor in Business Administration 2074-2078

Sainik Awasiya Mahavidhyala

Affiliated to Tribhuvan University
Sallaghari, Bhaktapur

Under the Guidance of: Submitted by:

Sushil Upreti Sweta Sah
Project Supervisor University Enrollment No.:7-2-1013-59-2017
Contents
1. BACKGROUND OF STUDY.................................................................................................3

2. OBJECTIVE OF STUDY........................................................................................................3

3. LITERATURE REVIEW.........................................................................................................3

a) Profitability Ratio.................................................................................................................3

b) Liquidity ratio...................................................................................................................4

4. RESEARCH METHODOLOGY.............................................................................................4

a) Research design:...................................................................................................................4

b) Nature and sources of Data:..............................................................................................4

c) Population and sample:.........................................................................................................4

d) Data Analysis Tools..........................................................................................................5

5. LIMITATION OF THE STUDY.............................................................................................5

6. REFERENCES.........................................................................................................................5
1. BACKGROUND OF STUDY

Financial statement analysis is a structural and logical way to present overall financial

performance of a financial institution. Both private and public sector can play a vital role for

the growth of the economy of a country. Commercial bank occupy an important place in the

framework of economy because they provide capital for the development of industry, trade,

business and other resources deficit sectors by investing the saving collects as deposits.

It also helps to evaluate and decision making for business operation. Business shareholders

try to concentrate to get overall business overview from profitability, liquidity, assets

management and solvency ratio analysis.

2. OBJECTIVE OF STUDY

This study has been conducted for the following objectives:

 To examine the relationship between liquidity and profitability.

 To determine the operational efficiency of the management.

 To know how efficiently the management has used the total assets.

 To provide constructive suggestion to overcome the problem.

 To identify the specific problem faced by the bank.

3. LITERATURE REVIEW
 a) Profitability Ratio

Profitability ratios are related to profit. These ratios are designed to highlight the end result
of business activities. The operating efficiency of a firm and its ability to ensure adequate
return to its shareholders depends ultimately on the profits earned by it. In this regards,
profitability ratios are the measure of efficiency and the search for. These ratios measure the
overall effectiveness of management. It provides an incentive to achieve efficiency. In this
report, the following profitability ratios are used:

b) Liquidity ratio
Liquidity ratios measure a company's ability to pay debt obligations and its margin of safety
through the calculation of metrics including the current ratio, quick ratio, and operating cash
flow ratio. Liquidity ratio analysis is the use of several ratios to determine the ability of an
organization to pay its bills in a timely manner. This ratio explicitly avoids inventory, which may
be difficult to convert into cash.

4. RESEARCH METHODOLOGY

a) Research design:

Research design is the plan, structure and strategy of investigation conceived so as to obtain a

number of research question and to control variance. Basically, the research design has

research hypothesis. The study tries to evaluate the liquidity and profitability position in NIC

Asia Bank. To accomplish the objectives, it has adopted the descriptive analytical type of

research design.

b) Nature and sources of Data:

This study was mainly based on primary data and less on secondary data. Primary data is

collected through direct face to face interview whereas secondary data is collected from

bank’s audited annual reports.

c) Population and sample:

Population refers not only to people but totality of all the observations that have been

selected for the study. And sample refers to a part chosen from the populations.

d) Data Analysis Tools

As statistical tools, mainly past trend, percentage change and Arithmetic Mean are used.

5. LIMITATION OF THE STUDY

In research process, there are some limitations as well. Some of the major challenges we had

to face during research process are:

 The study is limited to study of NIC ASIA Bank out of total commercial banks of

Nepal.

 This study is based on secondary data. So it may not be free from bias

 This study only focuses on profitability and liquidity of the bank.

 Simple techniques have been used in analysis.

6. REFERENCES

https://www.investopaper.com/news/nic-asia-bank-fourth-quarter-report/

www.nicasiabank.com.np

www.google.com

www.en.wikipedia.org