A

Project Report On
“Financial Statement Analysis of Bank of Maharashtra”

Name of the Student

SHASHI RANJAN
(BBA Finance 2017-20)

SUBMITTED TO

SAVITRIBAI PHULE UNIVERSITY OF PUNE

In Partial Fulfilment of Requirements
For the Award of Degree of
BACHELOR OF BUSINESS ADMINISTRATION
BBA(III YEAR)
2017-2020
SUBMITTED BY

SHASHI RANJAN

Under the guidance of

Prof. Shilpa Sant

SINHGAD COLLEGE OF ARTS AND COMMERCE

(SCOAC) NARHE Pune -411041

1
 GUIDE’S CERTIFICATE
This is to certify that the Project Report entitled “Financial Statement
Analysis of Bank of Maharashtra” which is being submitted herewith for
the award of the degree of Bachelor of Business Administration,
University of Pune, Pune is the result of the original research work
completed by Mr. Shashi Ranjan under my supervision and guidance and
to the best of my knowledge and belief the work embodied in this Project
Report has not formed earlier the basis for the award of any degree or
similar title of this or any other University or examining body.

Project Guide

Prof. Shilpa Sant

2
 BANK OF MAHARASHTRA
(KONDHWA BK PUNE) Date: 30th Sep 2019
Laxmi Niwas, Wagh Vasti, Somjai Chowk, Kondhwa Bk, Pune 411-048 #020 – 26931257

Fax 020-26931257 /E-mail: bom859@mahabank.co.in / brmgr859@mahabank.co.in

TO WHOMSOEVER IT MAY CONCERN

This is to certify that, Ms. SHASHI RANJAN is a student of Sinhgad

Institute of Management And Computer Application Pune Batch 2017-
2020 Course-Bachelor Of Business Administration (Finance Specialization)
from University of Pune, has successfully completed 60 Days internship
training programme from 14th June 2019 to 14th August 2019 at Pune with
Bank Of Maharashtra, Kondhwa Bk., Pune, for the project titled
“FINACIAL STATEMENT ANALYSIS OF BANK OK
MAHARASHTRA.”
This project work is of original nature and not copied from any other source
and further no part of this work has been submitted to any university as a
partial fulfilment conditions for passing any examination.
During this period of her internship programme with us she was found
punctual, hardworking, and inquisitive.
We wish her bright future & every success in life

3
 SINHGAD COLLEGE OF ARTS AND COMMERCE
(SCOAC) NARHE Pune -411041

D E C LA R AT I O N

I, Shashi Ranjan, hereby declare that the Project Report entitled “Comparative
analysis of Financial products of Bank of Maharashtra with other bank‟s” written and
submitted by me to the University of Pune, in partial fulfilment of the requirements for
the award of degree of Master of Business Administration under the guidance of Prof.
Shilpa Sant This is my original work and the conclusions drawn therein are based on
the material collected by myself.

Place: Pune Shashi Ranjan

Date: (Research Student)

4
 CONTENT PAGE:
Cerial.No. Particulars Page
No

1. Acknowledgment; 1
2. Chapter I:
Introduction of Topic: 2
1.1Basic Theoretical Concepts and Contexts of the Topic 3-22
1.2Objectives of the Project 23
1.3Scope of the Study 24

3. Chapter II:
Profile of the Organization 25
2.1 Banking in India 26-30
2.2 Introduction to the Organization 31-34
2.3 History of Bank of Maharashtra 35-38

4. Chapter III:
Research Design and Methodology 39
3.1 Research Design 40
3.2 Source and methods of Data collection 41-42

5. Chapter IV:
Data Presentation, Analysis and interpretation 43
4.1 Interpretation of results 44-56

6. Chapter V:
Findings and Suggestions 57
5.1 Main Findings 58-59

7. Limitations: 60
Major limitations of the study should be specified.

8. Bibliography 61

9. Annexure 62-63

5
 LIST OF FIGURES
Figure No. Title of the Figure Page No.
Figure No. 1 METHODS OF ANALYSIS: 5
Figure No. 2 Current Ratio 45

Figure No. 3 Debt equity ratio 47

Figure No. 4 Fixed Asset to Long Term Funds 49
ratio
Figure No. 5 Fixed asset turnover ratio 51
Figure No. 6 Current asset turnover ratio 52
Figure No. 7 Total asset turnover ratio 53

Figure No. 8 Return On Total Assets 56

6
 ACKNOWLEDGMENT

In the first place, I thank Prof Sampada Joshi , Principal SCOA,Narhe Pune for giving me
his valuable guidance for the project. Next I would like to thanks Prof. Shilpa Santa ,guide
of my project for being the chief facilitator of this project and helping me enhance my
knowledge in the field of banking sector. Without their help it would have been impossible for
me to complete the project
I wish to express my gratitude to BANK OF MAHARASHTRA for giving me an opportunity
to be a part of their esteemed organization and enhance my knowledge by granting permission
to do summer training project under their guidance.
I am deeply indebted to my guide, Mrs. AMRITASAGAR, Branch Manager, Bank Of
Maharashtra, for her valuable and enlightened guidance. She provided me with the
opportunity to learn in the bank and spared her valuable time to help me.
My special thanks to Miss.Shweta Deshmukh, and Mrs Chandani Shree Deputy Manager,
Bank of Maharashtra, for providing great support and help whenever was required.
This project has been possible due to the support of several wonderful individuals. I would
like to thank many unknown individuals, with whom I interacted. All of them with their due
cooperation and motivation made the completion of this project successful. I would like to
thank them all. The learning during the project was immense and valuable.

Place: Pune Shashi Ranjan

Date:

7
 Chapter I:
Introduction to the Topic

8
 Introduction:

1.1 Basic Theoretical Concepts and Contents of the Topic

FINANCIAL ANALYSIS:

Financial analysis is the process of identifying the financial strengths and weakness
of the firm. It is done by establishing relationships between the items of financial statements
viz., balance sheet and profit and loss account. Financial analysis can be undertaken by
management of the firm, viz., owners, creditors, investors and others

 Objectives of the financial analysis

Analysis of financial statements may be made for a particular purpose in view.

1. To find out the financial stability and soundness of the business enterprise.

2. To assess and evaluate the earning capacity of the business i.e. profitability.

3. To estimate and evaluate the fixed assets, stock etc., of the concern.

4. To estimate and determine the possibilities of future growth of business.

5. To assess and evaluate the firm‟s capacity and ability to repay short and long term
loans.
6. To gauge the debt servicing capacity of the firm.

9
 Parties interested in financial analysis
The users of financial analysis can be divided into two broad groups.
 Internal users

1. Financial executives
2. Top management

 External users

1. Investors
2. Creditor
3. Workers
4. Customers
5. Government
6. Public
7. Researchers

 Significance of financial analysis

Financial analysis serves the following purpose:
 To know the operational efficiency of the business:
The financial analysis enables the management to find out the overall efficiency of the firm.
This will enable the management to locate the weak Spots of the business and take necessary
remedial action.

 Helpful in measuring the solvency of the firm:

The financial analysis helps the decision makers in taking appropriate decisions for
strengthening the short-term as well as long-term solvency of the firm.

 Comparison of past and present results:

Financial statements of the previous years can be compared and the trend regarding various
expenses, purchases, sales, gross profit and net profit can be ascertained.

 Helps in measuring the profitability:

Financial statements show the gross profit, & net profit.

10
 METHODS OF ANALYSIS:

A financial analyst can adopt the following tools for analysis of the financial
statements. These are also termed as methods of financial analysis.

 Cash flow analysis

 Funds flow analysis
 Ratio analysis

Methods Of
analyzing the
f inancial
statements

Cash f low Fund f low

Rat io analysis
analysis analysis

Fig No. 1

11
 Different types of financial statements.

 Income statement: It shows whether the operations of the firm resulted in profit or loss at the
end of the particular period
 Balance Sheet: It shows the financial position of the business as on particular date. It
represents the assets owned by the business and the claims of the owners and creditors against
the assets in the form of liabilities as on the date of the statement.
 Fund Flow Statement: It describes the sources from which additional funds were derived and
the use to which these funds were put. The statement reveals the sources of funds and their
application for different purposes.
 Cash Flow Statements: It depicts the changes in cash position from one period to another. It
shows their flow and outflow of cash and helps the management in making plans for
immediate future.
 Schedules: These are the statements which explain the items given in Income statement and
Balance sheet. Schedules are a part of financial statements which give detailed information
about the financial position of a business organization.

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 Nature of Ratio Analysis:
Ratio Analysis is a powerful tool of financial analysis. A ratio is defined as "the
indicated quotient of mathematical expression" and as "the relationship between two or more
things". A ratio is used as benchmark for evaluating the financial position and performance of
the firm. The relationship between two accounting figures, expressed mathematically, is
known as a financial ratio. Ratio helps to summarizes large quantities of financial data and to
make qualitative judgment about the firm's financial performance.

The persons interested in the analysis of financial statements can be grouped under three
head owners (or) investors who are desired primarily a basis for estimating earning
capacity. Creditors who are concerned primarily with liquidity and ability to pay interest
and redeem loan within a specified period. Management is interested in evolving
analytical tools that will measure costs, efficiency, liquidity and profitability with a view
to make intelligent decisions.

STANDARDS OF COMPARISON:
The ratio analysis involves comparison for an useful interpretation of the financial
statements. A single ratio in itself does not indicate favorable or unfavorable condition. It
should be compared with some standard. Standards of comparison are:
1. Past Ratios

2. Competitor's Ratios

3. Industry Ratios

4. Projected Ratios

 Past Ratios: Ratios calculated from the past financial statements of the same firm.

 Competitor's Ratios: Ratios of some selected firms, especially the most progressive and
successful competitor at the same point in time.

 Industry Ratios: Ratios of the industry to which the firm belongs.

 Projected Ratios: Ratios developed using the projected financial statements of the same firm.

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TIME SERIES ANALYSIS
The easiest way to evaluate the performance of a firm is to compare its present ratios
with past ratios. When financial ratios over a period of time are compared, it is known as the
time series analysis or trend analysis. It gives an indication of the direction of change and
reflects whether the firm's financial performance has improved, deteriorated or remind
constant over time.

CROSS SECTIONAL ANALYSIS

Another way to comparison is to compare ratios of one firm with some selected firms
in the industry at the same point in time. This kind of comparison is known as the cross-
sectional analysis. It is more useful to compare the firm's ratios with ratios of a few carefully
selected competitors, who have similar operations.

INDUSTRY ANALYSIS
To determine the financial conditions and performance of a firm. Its ratio may be
compared with average ratios of the industry of which the firm is a member. This type of
analysis is known as industry analysis and also it helps to ascertain the financial standing and
capability of the firm & other firms in the industry. Industry ratios are important standards in
view of the fact that each industry has its characteristics which influence the financial and
operating relationships.

14
 About Ratio Analysis
The ratio analysis is the most powerful tool of financial analysis. Several ratios calculated
from the accounting data can be grouped into various classes according to financial activity or
function to be evaluated.

Definition:

“The indicate quotient of two mathematical expressions “and as “The relationship between
two or more things. “It evaluates the financial position and performance of the firm.
As started in the beginning many diverse groups of people are interested in analysing
financial information to indicate the operating and financial efficiency and growth of firm.
These people use ratios to determine those financial characteristics of firm in which they
interested with the help of ratios one can determine.

 The ability of the firm to meet its current obligations

 The extent to which the firm has used its long-term solvency by borrowing funds.
 The efficiency with which the firm is utilizing its assets in generating the sales revenue.
 The overall operating efficiency and performance of firm.

The information contained in these statements is used by management, creditors, investors

and others to form judgment about the operating performance and financial position of firm.
Uses of financial statement can get further insight about financial strength and weakness of
the firm if they properly analyze information reported in these statements. Management
should be particularly interested in knowing financial strength of the firm to make their best
use and to be able to spot out financial weaknesses of the firm to take suitable corrective
actions. The further plans firm should be laid down in new of the firm‟s financial strength and
weaknesses. Thus financial analysis is the starting point for making plans before using any
sophisticated forecasting and planning procedures. Understanding the past is a prerequisite for
anticipating the future.

15
 Types of Ratios :
Management is interested in evaluating every aspect of firm's performance. In view of the
requirement of the various users of ratios, we may classify them into following four important
categories:

1. Liquidity Ratio
2. Leverage Ratio
3. Activity Ratio
4. Profitability Ratio

1.Liquidity Ratio :

It is essential for a firm to be able to meet its obligations as they become due.
Liquidity Ratios help in establishing a relationship between cast and other current assets to
current obligations to provide a quick measure of liquidity. A firm should ensure that it does
not suffer from lack of liquidity and also that it does not have excess liquidity. A very high
degree of liquidity is also bad, idle assets earn nothing. The firm's funds will be unnecessarily
tied up in current assets. Therefore it is necessary to strike a proper balance between high
liquidity. Liquidity ratios can be divided into three types:

1.1 Current Ratio

1.2 Quick Ratio
1.3 Cash Ratio

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1.1 Current Ratio :

Current ratio is an acceptable measure of firm‟s short-term solvency Current assets

includes cash within a year, such as marketable securities, debtors and inventors. Prepaid
expenses are also included in current assets as they represent the payments that will not made
by the firm in future. All obligations maturing within a year are included in current liabilities.
These include creditors, bills payable, accrued expenses, short-term bank loan, income-tax
liability in the current year.
The current ratio is a measure of the firm's short term solvency. It indicated the
availability of current assets in rupees for every one rupee of current liability. A current ratio
of 2:1 is considered satisfactory. The higher the current ratio, the greater the margin of safety;
the larger the amount of current assets in relation to current liabilities, the more the firm's
ability to meet its obligations. It is a cured -and -quick measure of the firm's liquidity.
Current ratio is calculated by dividing current assets and current liabilities.

Current Assets
Current Ratio=---------------------------
Current Liabilities

17
1.2 Quick Ratio
Quick Ratio establishes a relationship between quick or liquid assets and current
liabilities. An asset is liquid if it can be converted into cash immediately or reasonably soon
without a loss of value. Cash is the most liquid asset, other assets that are considered to be
relatively liquid asset and included in quick assets are debtors and bills receivables and
marketable securities (temporary quoted investments).
Inventories are converted to be liquid. Inventories normally require some time for
realizing into cash; their value also has a tendency to fluctuate. The quick ratio is found out by
dividing quick assets by current liabilities.
Generally, a quick ratio of 1:1 is considered to represent a satisfactory current financial
condition. Quick ratio is a more penetrating test of liquidity than the current ratio, yet it
should be used cautiously. A company with a high value of quick ratio can suffer from the
shortage of funds if it has slow- paying, doubtful and long duration outstanding debtors. A
low quick ratio may really be prospering and paying its current obligation in time.

Current assets - Inventories

Quick Ratio = _________________________
Current Liabilities

1.3 Cash Ratio:

Cash is the most liquid asset; a financial analyst may examine Cash Ratio
and its equivalent current liabilities. Cash and Bank balances and short-term marketable
securities are the most liquid assets of a firm, financial analyst stays look at cash ratio. Trade
investment is marketable securities of equivalent of cash. If the company carries a small
amount of cash, there is nothing to be worried about the lack of cash if the company has
reserves borrowing power. Cash Ratio is perhaps the most stringent Measure of liquidity.
Indeed, one can argue that it is overly stringent. Lack of immediate cash may not matter if the
firm stretch its payments or borrow money at short notice.

Cash and bank balances + Current Investment

Cash Ratio= --------------------------------------------------------------------
Current Liabilities

18
2. Leverage Ratios :

Financial leverage refers to the use of debt finance while debt capital is a cheaper
source of finance: it is also a riskier source of finance. It helps in assessing the risk arising
from the use of debt capital. Two types of ratios are commonly used to analyze financial
leverage.

 Structural Ratios
 Coverage ratios.

Structural Ratios are based on the proportions of debt and equity in the financial structure of
firm.

Coverage Ratios shows the relationship between Debt Servicing, Commitments and
the sources for meeting these burdens.
The short-term creditors like bankers and suppliers of raw material are more concerned
with the firm's current debt-paying ability. On the other hand, long-term creditors like
debenture holders, financial institutions are more concerned with the firm's long-term
financial strength. To judge the long-term financial position of firm, financial leverage ratios
are calculated. These ratios indicated mix of funds provided by owners and lenders.
There should be an appropriate mix of Debt and owner's equity in financing the firm's
assets. The process of magnifying the shareholder's return through the use of Debt is called
"financial leverage" or "financial gearing" or "trading on equity". Leverage Ratios are
calculated to measure the financial risk and the firm's ability of using Debt to shareholder‟s
advantage.
Leverage Ratios can be divided into four types.
2.1 Debt equity ratio.
2.2 Debt ratio.
2.3 Interest coverage ratio
2.4 Proprietary ratio.

19
2.1 Debt equity ratio:
It indicates the relationship describing the lenders contribution for each
rupee of the owner's contribution is called debt-equity ratio. Debt equity ratio is directly
computed by dividing total debt by net worth. Lower the debt-equity ratio, higher the degree
of protection. A debt-equity ratio of 2:1 is considered ideal. The debt consists of all short term
as well as long-term and equity consists of net worth plus preference capital plus Deferred
Tax Liability.

Long term Debts

Debt Equity Ratio = ________________________
Shareholder funds (Equities)

2.2 Debt ratio

Several debt ratios may use to analyze the long-term solvency of a firm.
The firm may be interested in knowing the proportion of the interest-bearing debt in the
capital structure. It may, therefore, compute debt ratio by dividing total debt by capital
employed on net assets. Total debt will include short and long-term borrowings from financial
institutions, debentures/bonds, deferred payment arrangements for buying equipment‟s, bank
borrowings, public deposits and any other interest-bearing loan. Capital employed will
include total debt net worth.

Debt
Debt Ratio = ----------
Equity

20
2.3 Interest Coverage Ratio

The interest coverage ratio or the time interest earned is used to test the
firms‟ debt servicing capacity. The interest coverage ratio is computed by dividing earnings
before interest and taxes by interest charges. The interest coverage ratio shows the number of
times the interest charges are covered by funds that are ordinarily available for their payment.
We can calculate the interest average ratio as earnings before depreciation, interest and taxes
divided by interest.

EBIT
Interest Coverage ratio = ---------------
Interest

2.4 Proprietary ratio

The total shareholder's fund is compared with the total tangible assets
of the company. This ratio indicates the general financial strength of concern. It is a test of the
soundness of financial structure of the concern. The ratio is of great significance to creditors
since it enables them to find out the proportion of shareholders‟ funds in the total investment
of business.

Net worth
Proprietary Ratio = -------------------------------------- x 100
Total tangible assets

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3. Activity / Turnover Ratios :

Turnover ratios also referred to as activity ratios or asset management ratios, measure
how efficiently the assets are employed by a firm. These ratios are based on the relationship
between the level of activity, represented by sales or cost of goods sold and levels of various
assets. The improvement turnover ratios are inventory turnover, average collection period,
receivable turn over, fixed assets turnover and total assets turnover.

Activity ratios are employed to evaluate the efficiency with which the firm manages and
utilize its assets. These ratios are also called turnover ratios because they indicate the speed
with which assets are being converted or turned over into sales. Activity ratios thus involve a
relationship between sales and assets. A proper balance between sales and assets generally
reflects that asset utilization.

Activity ratios are divided into four types:

3.1 Total capital turnover ratio

3.2 Working capital turnover ratio
3.3 Fixed assets turnover ratio
3.4 Stock turnover ratio

3.1 Total capital turnover ratio:

This ratio expresses relationship between the amounts invested in this
assets and the resulting in terms of sales. This is calculated by dividing the net sales by total
sales. The higher ratio means better utilization and vice-versa.

Sales
Total assets turnover = ----------------------------
Capital employed

Some analysts like to compute the total assets turnover in addition to or instead of net assets
turnover. This ratio shows the firm's ability in generating sales from all financial resources
committed to total assets.

22
 3.2 Working capital turnover ratio:
This ratio measures the relationship between working capital and
sales. The ratio shows the number of times the working capital results in sales. Working
capital as usual is the excess of current assets over current liabilities. The following formula is
used to measure the ratio:

Sales
Working capital turnover ratio = -------------------------------
Working capital

3.3 Fixed asset turnover ratio:

The firm may which to know its efficiency of utilizing fixed assets and current
assets separately. The use of depreciated value of fixed assets in computing the fixed assets turnover
may render comparison of firm's performance over period or with other firms.

Net sales
Fixed asset turnover ratio = -------------------------
Fixed assets

The ratio is supposed to measure the efficiency with which fixed assets employed a high ratio
indicates a high degree of efficiency in asset utilization and a low ratio reflects inefficient use
of assets. However, in interpreting this ratio, one caution should be borne in mind, when the
fixed assets of firm are old and substantially depreciated, the fixed assets turnover ratio tends
to be high because the denominator of ratio is very low.

3.4 Stock turnover ratio:

Stock turnover ratio indicates the efficiency of firm in producing and selling its
product. It is calculated by dividing the cost of goods sold by the average stock. It measures
how fast the inventory is moving through the firm and generating sales.
The stock turnover ratio reflects the efficiency of inventory management. The higher
the ratio, the more efficient the management of inventories and vice versa .However, this may

23
not always be true. A high inventory turnover may be caused by a low level of inventory
which may result if frequent stock outs and loss of sales and customer goodwill.

Cost of goods sold

Stock turnover ratio = ------------------------------
Average stock

Opening stock + Closing stock

Average stock = --------------------------------------------
2

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4. PROFITABILITY RATIOS :

A company should earn profits to survive and grow over a long period of
time. Profits are essential but it would be wrong to assume that every action initiated by
management of a company should be aimed at maximizing profits. Profit is the difference
between revenues and expenses over a period of time.
Profit is the ultimate 'output' of a company and it will have no future if it
fails to make sufficient profits. The financial manager should continuously evaluate the
efficiency of company in terms of profits. The profitability ratios are calculated to measure
the operating efficiency of company. Creditors want to get interest and repayment of principal
regularly. Owners want to get a required rate of return on their investment.
Generally, two major types of profitability ratios are calculated:
 Profitability in relation to sales
 Profitability in relation to investment

Profitability Ratios can be divided into six types:

4.1 Gross profit ratio
4.2 Operating profit ratio
4.3 Net profit ratio
4.4 Return on investment
4.5 Earnings per share
4.6 Operating expenses ratio

4.1 Gross profit ratio:

First profitability ratio in relation to sales is the gross profit margin the gross profit
margin reflects.
The efficiency with which management produces each unit of product. This ratio indicates the
average spread between the cost of goods sold and the sales revenue. A high gross profit
margin is a sign of good management. A gross margin ratio may increase due to any of
following factors: higher sales prices cost of goods sold remaining constant, lower cost of
goods sold, sales prices remaining constant. A low gross profit margin may reflect higher cost
of goods sold due to firm's inability to purchase raw materials at favorable terms, inefficient
utilization of plant and machinery resulting in higher cost of production or due to fall in prices
in market.

25
This ratio shows the margin left after meeting manufacturing costs. It measures the efficiency
of production as well as pricing. To analyze the factors underlying the variation in gross profit
margin, the proportion of various elements of cost (Labor, materials and manufacturing
overheads) to sale may studied in detail.

Gross profit
Gross profit ratio = ------------------------x 100
Net sales

4.2 Operating profit ratio:

This ratio expresses the relationship between operating profit and sales. It is
worked out by dividing operating profit by net sales. With the help of this ratio, one can judge
the managerial efficiency which may not be reflected in the net profit ratio.

Operating profit
Operating profit ratio = ---------------------------x 100
Net sales

4.3 Net profit ratio:

Net profit is obtained when operating expenses, interest and taxes are
subtracted from the gross profit. Net profit margin ratio established a relationship between net
profit and sales and indicates management's efficiency in manufacturing, administering and
selling products.
This ratio also indicates the firm's capacity to withstand adverse economic conditions.
A firm with a high net margin ratio would be in an advantageous position to survive in the
face of falling selling prices, rising costs of production or declining demand for product
This ratio shows the earning left for share holders as a percentage of net sales. It measures
overall efficiency of production, administration, selling, financing. Pricing and tax
management. Jointly considered, the gross and net profit margin ratios provide a valuable
understanding of the cost and profit structure of the firm and enable the analyst to identify the
sources of business efficiency / inefficiency.

Net Profit
Net Profit Ratio = --------------------------- x 100
Net sales
26
4.4 Return on investment:
This is one of the most important profitability ratios. It indicates the
relation of net profit with capital employed in business. Net profit for calculating return of
investment will mean the net profit before interest, tax, and dividend. Capital employed
means long term funds.

E.B.I.T
Return on investment = ---------------------------------------- x 100
Capital employed

4.5 Earnings per share:

This ratio is computed by earning available to equity shareholders by the
total amount of equity share outstanding. It reveals the amount of period earnings after taxes
which occur to each equity share. This ratio is an important index because it indicates whether
the wealth of each shareholder on a per share basis as changed over the period.

Net profit
Earnings per share = ------------------------------------ x 100
Number of equity shares

27
4.6 Operating expenses ratio:

It explains the changes in the profit margin ratio. A higher operating

expenses ratio is unfavourable since it will leave a small amount of operating income to meet
interest, dividends. Operating expenses ratio is a yardstick of operating efficiency, but it
should be used cautiously. It is affected by a number of factors such as external uncontrollable
factors, internal factors. This ratio is computed by dividing operating expenses by sales.
Operating expenses equal cost of goods sold plus selling expenses and general administrative
expenses by sales.

Operating expenses
Operating expenses ratio = ----------------------------- x 100
Sales

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1.3 Objectives of the Project

1. To study and analyze the financial position of the Bank through ratio analysis.

2. To suggest measures for improving the financial performance of organization.

3. To analyze the profitability position of the company.

4. To assess the return on investment.

5. To analyze the asset turnover ratio.

6. To determine the solvency position of bank.

29
1.4 Scope of the Study
The scope of the study is limited to collecting financial data published in the annual reports of
the company every year. The analysis is done to suggest the possible solutions. The study is
carried out for 5 years (2014-15 to 2018-19).

Using the ratio analysis, firms past, present and future performance can be analyzed and this
study has been divided as short term analysis and long term analysis. The firm should
generate enough profits not only to meet the expectations of owner, but also to expansion
activities.

 To understand the actual working and analysis of financial statement.

 To study the relationship between the items of the balance sheet items and revenue
items.
 While doing project report one should know the various techniques that are used in
analyzing financial statements.
 Ratio analysis is one of the popular tools of financial statement analysis with the point of
view stake holders & stock holders.

30
 Chapter II:
INTRODUCTION TO THE INDUSTRY

31
 BANKING IN INDIA

Without a sound and effective banking system in India it cannot have a healthy
economy. The banking system of India should not only be hassle free but it should be
able to meet new challenges posed by the technology and any other external and
internal factors. For the past three decades India's banking system has several
outstanding achievements to its credit. The most striking is its extensive reach. It is no
longer confined to only metropolitans or cosmopolitans in India. In fact, Indian
banking system has reached even to the remote corners of the country. This is one of
the main reasons of India's growth process.

HISTORY:
The first bank in India, though conservative, was established in 1786. From 1786 till
today, the journey of Indian Banking System can be segregated into three distinct
phases. They are as mentioned below:
· PHASE I - Early phase from 1786 to 1969 of Indian Banks
· PHASE II - Nationalization of Indian Banks and up to 1991
· PHASE III - Indian Financial & Banking Sector Reforms after 1991.

32
 PHASE I:

The General Bank of India was set up in the year 1786. Next came Bank of Hindustan
and Bengal Bank.
The East India Company established
 Bank of Bengal (1809),
 Bank of Bombay(1840) and
 Bank of Madras (1843) as independent units and called it Presidency Banks.
These three banks were amalgamated in 1920 and Imperial Bank of India was
established which started as private shareholders banks, mostly Europeans
shareholders. During the first phase the growth was very slow and banks also
experienced periodic failures between 1913 and 1948. There were approximately 1100
banks, mostly small. To streamline the functioning and activities of commercial banks,
the Government of India came up with The Banking Companies Act, 1949 which was
later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act
No.23 of 1965). Reserve Bank of India was vested with extensive powers for the
supervision of banking in India as the Central Banking Authority. During those day‟s
public has lesser confidence in the banks. As an aftermath deposit mobilization was
slow. Abreast of it the savings bank facility provided by the Postal department was
comparatively safer. Moreover, funds were largely given to the traders.

33
 PHASE II:
Government took major steps in this Indian Banking Sector Reform after
independence. In 1955, it nationalized Imperial Bank of India with extensive banking
facilities on a large scale especially in rural and semi-urban areas. Second phase of
nationalization Indian Banking Sector Reform was carried out in 1980 with seven
more banks. This step brought 80% of the banking segment in India under
Government ownership.

The following are the steps taken by the Government of India to Regulate Banking
Institutions in the Country:
· 1949: Enactment of Banking Regulation Act.
· 1955: Nationalization of State Bank of India.
· 1959: Nationalization of SBI subsidiaries.
· 1961: Insurance cover extended to deposits.
· 1969: Nationalization of 14 major banks.
· 1971: Creation of credit guarantee corporation.
· 1975: Creation of regional rural banks.
· 1980: Nationalization of seven banks with deposits over 200 crores.
After the nationalization of banks, the branches of the public sector bank India raised
to approximately 800% in deposits and advances took a huge jump by
11,000%.Banking in the sunshine of Government ownership gave the public implicit
faith and immense confidence about the sustainability of these institutions.

34
 PHASE III
This phase has introduced many more products and facilities in the banking sector in
its reforms measure. In 1991, under the chairmanship of M Narasimham, a committee
was set up by his name which worked for the liberalization of banking practices.
The country is flooded with foreign banks and their ATM stations. Efforts are being
put to give a satisfactory service to customers. Phone banking and net banking is
introduced. The entire system became more convenient and swift. The financial system
of India has shown a great deal of resilience. It is sheltered from any crisis triggered by
any external macroeconomics shock as other East Asian Countries suffered. This is all
due to a flexible exchange rate regime, the Foreign Reserves are high, the capital
account is not yet fully convertible, and banks and their customers have limited foreign
exchange exposure.

35
 NATIONALIZED BANKS IN INDIA

Banking System in India is dominated by nationalized banks. The nationalization of

banks in India took place in 1969 by Mrs. Indira Gandhi the then prime minister. The
major objective behind nationalization was to spread banking infrastructure in rural
areas and make available cheap finance to Indian farmers. Fourteen banks were
nationalized in 1969.
Before 1969, State of India (SBI) was only public sector bank in India. SBI was
nationalized in 1955 under the SBI Act of 1955. The second phase of nationalization
of Indian banks took place in the year 1980. Seven more banks were nationalized with
deposits over 200 crores

PRIVATE BANKS

All the banks in India were earlier private banks. They were founded in the pre-
independence era to cater to the banking needs of the people. But after nationalization
of banks in 1969 public sector banks came to occupy dominant role in the banking
structure. Private sector banking in India received a fillip in 1994 when Reserve Bank
of India encouraged setting up to private banks as part of its policy of liberalization of
the Indian Banking Industry. Housing Development Finance Corporation Limited
(HDFC) was amongst the first to receive an „In principle‟ approval from the Reserve
Bank of India (RBI) to set up a bank in the private sector.
Private Banks have played a major role in the development of Indian banking industry.
They have made banking more efficient and customer friendly. In the process they
have jolted public sector banks out of complacency and forced them to become more
competitive.

36
 INTRODUCTION TO THE ORGANIZATION

Bank of Maharashtra

Company Profile:

Bank of Maharashtra is the premier bank of Maharashtra, operating in the country of

India.Registered on 16th September 1935 with an authorized capital of Rs.10.00 lack
and commenced business on 8thFeb 1936.Known as a common man‟s bank since
inception, its initial help to small units has given birth to many of today‟s industrial
houses The bank got nationalized by the Government of India in the year 1969. After
nationalization in 1969.. With a total number of 1421 branches located all over India as
of April 2009, the bank claims to have the largest number of branches within the state
of Maharashtra, among all the Public Sector banks.

Commonly known as a common man's bank, Bank of Maharashtra adopts a

philosophy of "Technology with personal touch", and follows its motto stating "One
Family, One Bank, Bank of Maharashtra".

Aims
The bank wishes to cater to all types of needs of the entire family, in the whole
country. Its dreams is “One Family, One Bank”

37
 Vision
To be a vibrant, forward looking, techno-savvy, customer centric bank serving diverse
sections of the society, enhancing shareholders‟ and employees‟ value while moving
towards global presence.

Mission

 To ensure quick and efficient response to customer expectations.

 To innovate products and services to cater to diverse sections of society.

 To adopt latest technology on a continuous basis.

 To build proactive, professional and involved workforce.

 To enhance the shareholders‟ wealth through best practices and corporate governance.

 To enter international arena through branch network.

 To be a vibrant, forward looking, techno-savvy, customer centric bank serving diverse

sections of the society, enhancing shareholders' and employees' value while moving
towards global presence.

38
 Other Highlights

Apart from providing regular banking services to the customers, Bank of

Maharashtra has established two Joint Ventures to fulfill its other commitments
towards the general public and society. These Joint Ventures are M-SETI and
Mahabank Info Centre. Mahabank Self-Employment Training Institute (M-SETI) is
an effort initiated by Mahabank Agricultural Research & Rural Development Fund
(MARDEF), a trust run by Bank of Maharashtra receiving help from National Bank
for Rurl Development (NABARD). The institute runs various self-employment
oriented training courses for the rural unemployed youth from the districts of Pune,
Kolhapur, Satara, Sangli, Nashik, Ahmednagar, Jalgaon, Dhule and Nandurbar.
Mahabank Info Centre is a yet another initiative by Bank of Maharashtra aimed at
providing various retail baking related information to the customers, and enabling
smoother operations for them.

HeadOffice
Bank of Maharashtra Lokmangal,
1501, Shivajinagar, Pune (Maharashtra) - 411 005
Website: www.bankofmaharashtra.in

AREA WISE CLASSIFICATION OF BRANCHES AS ON 31.3.18 TO 31.3.19

Sr. No Classifications As on 31.3.18 31.3.19

1 Rural 591 648
2 Semi – Urban 357 424
3 Urban 344 368
4 Metropolitan 436 450
Total 1728 1890

39
CHAIRMAN OF BANK

Name of Chairman Year

Sri A C Perreira 2014-15

Shri A S Bhattacharya 2015-16

Shri.Narendra Singh 2016-17

Shri.Sushil Muhnto 2017-18

40
HISTORY OF THE BANK OF MAHARASHTRA

PRE NATIONALISATION
Bank of Maharashtra is a common man‟s bank. It was registered on 16 th September
1935 with an authorized capital of Rs.10.00 lack by a group of visionaries with the
objectives to serve the common man from Pune who were who were till then neglected
by the Banking system. The Bank started functioning on 8th February 1936. In July
1969 when it was nationalized with 13 other major Banks Rights from its inception,
the focus of the Bank has been to assist small business enterprises, traders, self-
employed and other commonly known as priority sector category.

POST NATIONALISATION
After Nationalization, the Bank expanded rapidly in other states. At present the Bank
has 1361 branches and 13 Extension counters in 22 states and 2 Union territories of
which 45% of the branches are in rural centers and 15% in semi urban centers. In the
state of Maharashtra the Bank is a force to reckon, with more than 900 branches – the
largest network of branches by any public sector Bank in a state. Bank of Maharashtra
started firstly at Bajirav Road Swargar pune. It had business around 50,000 crore in the
year 2006. The Bank has been operating in three-tier system i.e. corporate office,
regional office and branches. The bank has now totally 1361 regional offices and
branches in which, 588 rural branches, 201 semi- urban branches, 287 urban branches
and 256 metropolitan branches.

41
Commitment stated in the prospectus issued on 21-10-1935:

“Steadily to spread its business operations all over Maharashtra and as opportunity allows,
outside that area offering varied services to the general public while trying to be useful to
trade , commerce and industry consistently with high standards of safety and efficiency”

1936 Commenced operations on 08-02-1936 in Pune.

1938 Second branch of the bank was opened in 1938 at Fort, Bombay.

1940 Third branch came up at Deccan Gymkhana, Pune.

1944 Status as Scheduled Bank obtained.

1946 Deposits crossed Rs One crore mark.

Formed fully owned subsidiary, The Maharashtra Executor & Trustee
Company.
First branch outside Maharashtra opened in Hubli (Mysore Starte, Now
Karnataka).

1949 Expansion to AP: Hyderabad branch opened

1963 Expansion to Goa: Panjim Branch opened

1966 Expansion to Madhya Pradesh: Indore branch opened .

Entered in Gujarat: Baroda branch opened.

1969 Nationalisedalongwith 13 other Banks.

Entry in Delhi by opening Karolbagh branch on 19-12-69.

1974 Deposit base crossed Rs. 100 Crore mark.

1976 MarathwadaGrameena Bank, first RRB established on 26-08-1976.

1978 New Head Office building inaugurated by Hon'ble Prime Minister of India
Shri. Morarji Desai
Deposits crossed the figure of Rs.500 Crores

1979 “Mahabank Agricultural Research and Rural Development Foundation”,

registered as a public trust, was established for undertaking research and
extension work and to provide more extensive services to farmers.

1985 500th branch in Maharashtra state was opened at the hands of the then Prime
Minister, Mrs Indira Gandhi at Nariman Point, Mumbai.
42
 First Advanced Ledger Posting Machine (ALPM) was installed at the branch.
Golden Jubilee Year Celebrations launched at the hands of Dr. Manmohan
Singh, Governor Reserve Bank of India.

1986 Thane Grameena Bank sponsored.

1987 The 1000th branch of the Bank was inaugurated at Indira vasahat, Bibwewadi,
Pune at the auspicious hands of Dr.ShankarDayal Sharma, the Honourable
Vice President of India.

1991 "Mahabank Farmer Credit Card " was launched.

Entered in to Domestic Credit Card Business.
Main Frame Computer installed.
Became member of the SWIFT.

1995 Diamond Jubilee Celebrations - Dr C Rangarajan the RBI Governor was the
Chief Guest.
Deposits crossed Rs 5000 crore mark.

1996 Moved into “A” category from the earlier “C” category. Autonomy obtained.

2000 Deposits crossed Rs 10000 crore mark.

2004 Public Issue of Shares – 24% owned by Public.

Listed in BSE and NSE.

2005 Bancassurance and Mutual Fund distribution business started.

2006 Crossed total business level of Rs.50,000 Crore.

Branch CBS Project started.

2009 Entered in to 75th year of dedicated service to the Nation.

Adopted 75 underdeveloped villages for integrated overall development.

2010 100% CBS of branches achieved Total Business crossed Rs One lakh crore.
Opened 76 branches in the Platinum Year taking the total to 1506.
Platinum Jubilee Year concluding ceremony at the hands of the then Finance
Minister, Shri Pranab Mukherjee held at VigyanBhavan, New Delhi.
New initiatives like Mahachetana, opening of E-lounges in Pune, Mumbai and
Delhi, Micro Asset Recovery cells were implemented.

2011 First SHG Branch opened in Pune.

Bank sponsored Maharashtra Gramin Bank achieved 100% CBS in record 77
days.
77th anniversary of Foundation day celebrations at the hands of Honble
Finance Minister, Shri Pranab Mukherjee dedicating 5 specialised branches to
SHGs and opening of 5 Mid-Corporate branches on the occasion.
First ever visit of Union Finance Minister to Bank‟s Central Office - Honble
Finance Minister, Shri Pranab Mukherjee visits Lokmangal, the Bank‟s Head
quarters in Pune on 7-11-2011.

43
2012 Hon‟ble Union Finance Minister Shri P Chidambaram inaugurates the Bank‟s
1624th branch at Rajgambiram on 25.08.2012.
Sept 2012: Bank‟s total business crossed Rs.1,50,000cr and reached the level
of Rs. 1,51,320 crore.
Bank of Maharashtra awarded “Best Banker – Customer Friendliness” for
2012 by The Sunday Standard.
Received the Dun & Bradstreet – Polaris Financial Technology Banking Award
2012 as Best Public Sector Bank under the category “Asset Quality”.
BoM hosted Bancon 2012 in Pune on 24th-25th November 2012. Hon‟ble
Union Finance Minister Shri P. Chidambaram inaugurated the Conference.

44
 Chapter III

Research Design and Methodology

45
3.1 Research Design and Methodology:

Research Design:
Research Design is arrangement of conditions for collection and analysis of data in
a manner that aims to combine relevance to research purpose with economy in procedure.

- Prof. Kothari

Research Design:

In view of the objects of the study listed above an exploratory research

design has been adopted. Exploratory research is one which is largely interprets and already
available information and it lays particular emphasis on analysis and interpretation of the
existing and available information.

 To know the financial status of the company.

 To know the credit worthiness of the company.

 To offer suggestions based on research finding.

46
3.2 Source and methods of Data collection

Data Collection Methods:

 Primary Data
Information collected from banks internal guide and manager of bank. Primary
data is first-hand information.

 Secondary Data
Information collected from banks balance sheet and profit and loss account.
Secondary data is second hand information.

Data Collection Tools

To analyze the data acquire from the secondary sources “Ratio Analysis” The
scope of the study is defined below in terms of concepts adopted and period under focus.
First the study of Ratio Analysis is confined only to the Bank of Maharashtra.
Secondly the study is based on the annual reports of the bank for a period of 5 years from
2009-10 to 2013-14 the reason for restricting the study to this period is due time constraint.

 Primary sources of data collection

A primary source of data collection is related to first-hand information. This primary source is
based on direct communication with people who are expert in their fields.

In the primary source of data collection the information is obtained through the questionnaire,
interviews, survey. These are three important methods of receiving information, which is
essential for the project work

 Interviews Methods

This is very important and first method of data collection. In this method, I met some people
who are the expert in their field. It is verbal method of collecting data. In interviews method,
face to face communication is possible. We can also develop good contact with people. This
method is very useful and helpful for collecting data or information from the interviewer.

47
  Secondary sources of data collection
This is another second type of data collections. It is very important source of data collection
through secondary materials. This is an indirect source, the information, which is useful for us
is in the information and pick out data that he is needed for the project work. Through these
methods, the researcher can also collects the data and information in the form of photograph,
graphs, charts, etc. Secondary source of data collection includes following sources of
information.

OTHERS FORMS

For the purpose of secondary data collection, other forms of information are also used. Annual
reports booklets, house journals, websites, pamphlets etc. Also used by the researcher for
obtaining information and data for the completion of the project

48
 Chapter IV
Data Presentation, Analysis and Interpretation

49
4.1 Interpretation of results

1. Current Ratio :

The ratio between all current assets and all current liabilities; another way of
expressing liquidity. It is a measure of the firm‟s short-term solvency. It indicates the
availability of current assets in rupees for every one rupee of current liability. A ratio of
greater than one means that the firm has more current assets than current claims against them.
Current assets include cash, current investments, debtors, inventories (stocks),
loans and advances and prepaid expenses. Current liabilities represent liabilities that are
expected to mature in the next twelve months. These comprises of loans, secured or
unsecured, that are due in the next twelve months and current liabilities and provisions.

Current Assets
Current ratio = --------------------------------------
Current Liabilities

Sr. No. Year Current Assets Current Liabilities Current Ratio

1 2014-15 2,063.16 2,096.36 0.984

2 2015-16 2,354.22 2,549.99 0.923
3 2016-17 2,701.35 2,941.33 0.918
4 2017-18 2449.39 3,341.45 0.733
5 2018-19 2,601.76 3,822.35 0.680

50
 Current Ratio
1.2

0.8

0.6
Current Ratio
0.4

0.2

0
2014-15 2015-16 2016-17 2017-18 2018-19

Fig No.2

Interpretation:
A current ratio of 2:1 indicates a highly solvent position. From above calculations it is seen
that the bank is in insolvent position. And there is decrease in current assets over current
liabilities. The bank should take note on how to decrease the current liability.

51
 2. Fixed Asset to Long Term Funds ratio:

The fixed asset is shown as a proportion to long term funds as shown in the
formula. This ratio indicates the proportion of long term funds deployed in fixed assets. Fixed
assets represent the gross fixed assets minus depreciation provided on this till date of
calculation. Long term fund includes share capital, reserves and surplus and long term loans.
The higher the ratio indicates the safer the funds available in case of liquidation. It also
indicates the proportion of long term funds that is invested in working capital.

Fixed Assets = Gross Assets – Depreciation i.e. Net Block

Long term funds = Share Capital + reserves and surplus + Long term loans

Fixed Assets
Fixed Asset to Long Term Funds ratio: _________________
Long term Funds

S.No YEAR Fixed Asset Long Term Funds F.A to L.T

(net block) In Cr. Funds
In Cr.
1. 2014-15 659.53 2403.84 0.274
2. 2015-16 666.79 3527.38 0.189
3. 2016-17 600.65 4347.63 0.138
4. 2017-18 1,429.47 6396.94 0.223
5. 2018-19 1,446.01 7368.15 0.196

52
 F.A to L.T Funds
0.3

0.25

0.2

0.15
F.A to L.T Funds
0.1

0.05

0
2014-15 2015-16 2016-17 2018-19 2019-20

Fig No. 4

Interpretation:

The ratio is decreasing year by year; we can say that low ratio does not
indicate the safer the funds available in case of liquidation. The ratio is considerably low i.e.
0.2, 0.3.

53
 3. Fixed asset turnover ratio:
The ratio is supposed to measure the efficiency with which fixed asset is
employed a high ratio indicates a high degree of efficiency in asset utilization and a low ratio
reflects inefficient use of assets. When the fixed assets of the firm are old and substantially
depreciated, the fixed assets turnover ratio tends to be high because the denominator of the
ratio is very low.

Net Sales
Fixed asset turnover ratio = -------------------------
Avg. Net Fixed Asset

Net fixed assets: Net Block

Sales of bank:

Interest & Discount on Advances & Bills

Income From Investment
Interest On Balances with RBI and Other Inter-Bank Funds
Interest

S.No Year Sales Avg. net Fixed Asset F.A.T

In Cr (net block) ratio
In Cr.
1. 2014-15 5,207.61 659.53 7.895
2. 2015-16 5,940.60 666.79 8.909
3. 2016-17 7,684.47 600.65 12.793
4. 2017-18 9,613.43 1,429.47 6.725
5. 2018-19 11,956.66 1,446.01 8.268

54
 F.A.T ratio
14

12

10

6 F.A.T ratio

0
2014-15 2015-16 2016-17 2017-18 2018-19

Fig No. 5

Interpretation:

There has been increase in the ratio of the year 2014-2015 and it further
decreased so the bank should utilize its assets more as in year 2017-18.

55
 4. Current asset turnover ratio:

Net Sales
Current asset turnover ratio= -----------------------
Current Assets

S.No Year Sales Current Assets C.A.T. Ratio

In Cr
1. 2014-15 5,207.61 2,063.16 2.524
2. 2015-16 5,940.60 2,354.22 2.523
3. 2016-17 7,684.47 2,701.35 2.844
4. 2017-18 9,613.43 2449.39 3.924
5. 2018-19 11,956.66 2,601.76 4.595

C.A.T. Ratio
5
4.5
4
3.5
3
2.5
C.A.T. Ratio
2
1.5
1
0.5
0
2014-15 2015-16 2016-17 2017-18 2018-19

Fig No. 6

Interpretation:

The current asset turnover ratio has increased from 2009-10 to 2014-19.

56
 5. Total asset turnover ratio:
This ratio ensures whether the capital employed has been effectively used or not. This is
also test of managerial efficiency and business performance. Higher total capital turnover
ratio is always required in the interest of the company.

Sales
Total asset turnover ratio= ---------------------------
Total Assets

S.No YEAR Sales Total Assets T.A.T Ratio

In Cr In Cr.
1. 2014-15 5,207.61 71,055.79 0.073

2. 2015-16 5,940.60 76,442.21 0.077

3. 2016-17 7,684.47 88,017.38 0.087

4. 2017-18 9,613.43 116,952.79 0.082

5. 2018-19 11,956.66 136,320.05 0.087

T.A.T Ratio
0.09

0.085

0.08

T.A.T Ratio
0.075

0.07

0.065
2014-15 2015-16 2016-17 2017-18 2018-19

Fig No. 7

57
Interpretation:
The higher the ratio indicates overtrading of total assets, while a low ratio
indicates idle capacity. From the above data we can say that there is overtrading of assets as
the ratio has increased from past years.

58
 6. Return On Total Assets:
The profitability of the firm is measured by establishing relation of
net profit with the total assets of the organization. This ratio indicates the efficiency of
assets in generating revenue. Return on assets is a financial ratio that shows the
percentage of profit that a company earns in relation to its overall resources. It is
commonly defined as net income (pretax profit) / total assets. ROA is known as a
profitability or productivity ratio, because it provides information about management‟s
performance in using the assets of the business to generate income.

Net Profit after Tax

Return on Total Assets: ______________________ * 100
Total assets

Sr. No YEAR Profit After Tax Total Assets Return on Total

In Cr. In Cr. Assets (%)
1. 2014-15 439.66 71,055.79 0.006

2. 2015-16 177.58 76,442.21 0.002

3. 2016-17 425.96 88,017.38 0.004

4. 2017-18 759.52 116,952.79 0.006

5. 2018-19 385.97 136,320.05 0.002

59
 Return on Total assets %
0.007

0.006

0.005

0.004

0.003 Return on Total assets %

0.002

0.001

0
2014-15 2015-16 2017-18 2017-18 2018-19

Fig. 8
Interpretation:
In the above calculation we came to know that, there is ineffective
utilization of assets in generating revenue. The returns are decreasing more than
increasing every year.

60
 Chapter V:

Findings and Suggestion

61
 5.1 Main Findings:

 Current Ratio :
A current ratio of 2:1 indicates a highly solvent position. A current ratio of 1.33:1 is
considered by banks as the minimum acceptable level for providing working capital finance.
From above calculations it is seen that the company is in solvent position. And there is
increase in current assets over current liabilities.

 Debt equity ratio:

A debt – equity ratio of 2:1 is the norm accepted by financial institutions. If the proportion of
debt is low, a company is said to be low-geared and vice versa. In this case the company‟s
last year debt equity ratio is considerably low than the last year, and 2016-17 year had highest
D/E Ratio.

 Fixed Asset to Long Term Fund Ratio:

The ratio is decreasing year by year; we can say that low ratio does not indicate the safer the
funds available in case of liquidation. The ratio is considerably low i.e. 0.2, 0.3.

 Fixed asset turnover ratio:

There has been increase in the ratio of the year 2016-2017 and it further decreased so the bank
should utilize its assets more as in year 2016-17

 Debtors turnover ratio:

The higher the debtor‟s turnover ratio the better the position of the company. In this case, the
ratio has been increasing over the years that mean the company is in good and sound position.

62
  Total asset turnover ratio:

The higher the ratio indicates overtrading of total assets, while a low ratio indicates idle
capacity. From the above data we can say that there is overtrading of assets as the ratio is
increasing in the last few years

 Return On Total Assets:

In the above calculation we can to end that, there is effective utilization of

assets in generating revenue. The returns are increased every year. In the year 2009 the ratio is
3.09 and in the year 2018 the ratio is 10.78

63
LIMITATIONS:

 The study was limited to only four years Financial Data.

 The study is purely based on secondary data which were taken primarily from
Published annual reports of Bank of Maharashtra.
 The ratio is calculated from past financial statements and these are not indicators of
future.
 The ratio was purely calculated on information available on companys website.

64
Bibliography:

Books:

1. Ravi M Kishore : Financial Management (Taxmann‟s)

2. M.Y.Khan & P.K.Jain : Financial Management ( Tata McGraw Hill)
3. Investment Analysis and Portfolio Management : Prasanna Chandra (Tata
McGraw Hill)

Web-sites:

www.moneyvontrol.com
www.bankofmaharashtra.com
www.wikipedia.com

65