Research methodology

The procedure adopted for conducting the research requires a lot of attention as it has direct bearing on accuracy, reliability and adequacy of results obtained. It is due to this reason that research methodology, which we used at the time of conducting the research, needs to be elaborated upon. It may be understood as a science of studying how research is done scientifically. So, the research methodology not only talks about the research methods but also considers the logic behind the method used in the context of the research study. Research Methodology is a way to systematically study and solve the research problems. If a researcher wants to claim his study as a good study, he must clearly state the methodology adapted in conducting the research the research so that it way be judged by the reader whether the methodology of work done is sound or not.

The Research Methodology here includes:-

Objective of study Meaning of Research. Research Problem. Research Design. Data Collection method. Analysis and interpretation of Data Limitation of study

Page 1

 Protecting the property of the business. It guides the researcher and keeps him on track. Without objective no research can be conducted and no result can be obtained.  Compliances with legal requirement. These are shown below :1. 2. 2) To see whether ICICI Bank is going well or not in different areas. Every study must have an objective for which all the efforts have been done. Primary objective :1) To analyse the financial statements of the corporation to assess it¶s true financial position by the use of ratios. Page 2 . IMPORTANCE OF THE STUDY  By ³FINANCIAL PERFORMANCE ANALYSIS OF ICICI Bank´ we would be able to get a fair picture of the financial position of ICICI Bank. The objective of the study gives direction to go through the research problem. Objectives are the main aspect of every study. I have two objectives regarding my research project. Primary objective 2.OBJECTIVE OF THE STUDY Objectives are the ends that states specifically how goal be achieved. Secondary objective 1. Secondary objective :1) To find out the shortcomings in ICICI Bank. On the basis of objective all the research process is followed.  By showing the financial performance to various lenders and creditors it is possible to get credit in easy terms if good financial condition is maintained in the company with assets outweighing the liabilities.

Research comprises defining and redefining problems. Every researcher has to face many problems which conducting any research that¶s why problem statement is defined to know which type of problems a researcher has to face while conducting any study. a problem statement refers to some difficulty. Research is thus. ³Problem well defined is problem half solved. ³To ERR IS THE HUMAN´ is a proverb which indicates that no one is perfect in this world. Making deductions and reaching conclusions to determine whether they if the formulating hypothesis. Research is an art of scientific investigation. which researcher experiences in the context of either a theoretical or practical situation and wants to obtain the solution for the same. an original contribution to the existing stock of knowledge making for its advancement. It is said that. Research Problem The first step while conducting research is careful definition of Research Problem. formulating hypothesis or suggested solutions. It is a careful investigation or inquiry especially through search for new facts in any branch of knowledge.Meaning of Research: Research is defined as ³a scientific and systematic search for pertinent information on a specific topic´. Research is a systematized effort to gain now knowledge. Research is an academic activity and this term should be used in a technical sense. The search for knowledge through objective and systematic method of finding solutions to a problem is research. The problem statement here is:³TO MAKE A FINANCIAL ANALYSIS OF FINANCIAL STATEMENTS OF ICICI BANK´ Page 3 .´ Basically.

The design is such studies must be rigid and not flexible and most focus attention on the following:-           What is the study about? Why is the study being made? Where will the study be carried out? What type of data is required? Where can be required data be found? What period of time will the study include? What will be sample design? What techniques of data collection will be used? How will the data be analyzed? In what style will the report be prepared? TYPES OF RESEARCH DESIGN :  EXPERIMENTAL RESEARCH DESIGN  EXPLORATORY RESEARCH DESIGN  DESCRIPTIVE& DIAGNOSTIC RESEARCH Exploratory Research Design: This research design is preferred when researcher has a vague idea about the problem the researcher has to explore the subject. Research Design includes and outline of what the researcher will do form writing the hypothesis and it operational implication to the final analysis of data. It also include the time and cost budget since most studies are done under these two cost budget since most studies are done under theses tow constraints. It constitutes the blueprint for the collection measurement and analysis of data.Research Design A research designs is the arrangement of conditions for collection and analysis data in a manner that aims to combine relevance to the research purpose with economy in procedure. Research Design is the conceptual structure with in which research in conducted. Page 4 . Experimental Research Design ± The research design is used to provide a strong basis for the existence of casual relationship between two or more variables. A research design is a framework for the study and is used as guide in collection and analyzing the data. It is a strategy specifying which approach will be used for gathering and analyzing the data.

SECONDARY DATA .icici. From the study. It was achieved by a direct approach and observation from the officials of the company. It is based on some previous understanding of the matter. The main tool in gathering primary data was investigation and observation. suitable. Hence by making the type of the research conducted to be both Descriptive and Analytical in nature.e www. Primary data is collected by various approaches so as to get a precise. TYPE OF DATA USED IN THE STUDY The required data for the study are basically secondary in nature and the data are collected from y y The audited reports of the company. Diagnostic Research Design It determines the frequency with which something occurs or its association with something else. RESEARCH DESIGN USED IN THE STUDY: Descriptive research design is used in this study because it will ensure the minimization of bias and maximization of reliability of data collected. accurate. There are two types of data ± PRIMARY DATA It is first hand data. Data Collection Method The process of data collection begins after a research problem has been defined and research design as been chalked out. It has always been important for the completion of any report. It provides reliable. when and how is the data which is already collected by someone else. Researcher has to analyze the data and interprets the results. realistic and relevant data. adequate and specific knowledge. the type of data to be collected and the procedure to be used for this purpose were decided.Descriptive Research Design ± It seeks to determine the answers to who. which is collected by researcher itself. what. Descriptive study is based on some previous understanding of the topic. Research has got a very specific objective and clear cut data requirements The researcher had to use fact and information already available through financial statements of earlier years and analyse these to make critical evaluation of the available material. INTERNET ± which includes required financial data collected form ICICI Bank¶s official website i. and some other websites on the internet for the purpose of getting all the required financial data of the bank and to get detailed knowledge about ICICI Bank for the convenience of study. Page 5 .

Due to the limited time available at the disposable . Comparative statement. Methods of data analysis The data collected were edited. Page 6 . The analysis and interpretation are based on secondary data contained in the published annual reports of ICICI Bank for the study period.y y Brouchers of ICICI Bank. Inter firm comparison was not possible due to the non availability of competitors data. the study has been confined for a period of 5 years (2005-2010). 3. 4. The valuable cooperation extended by staff members and the branch manager of ICICI bank. Ratio itself will not completely show the company¶s good or bad financial position. classified and tabulated for analysis. Branch manager was reluctant for giving financial data of the bank.dharmshala contributed a lot to fulfill the requirements in the collection of data in order to complete the project. The study of financial performance can be only a means to know about the financial condition of the company and cannot show a through picture of the activities of the company . Cash Flow Statement. Trend Percentage. The analytical tools used in this study are: ANALYTICAL TOOLS APPLIED: The study employs the following analytical tools: 1. Ratio Analysis. 2. Limitations of study         Difficulty in data collection. Limited knowledge about the bank in the initial stages.

The final step is interpretation and drawing of inference and conclusions. and so on and the Profit And Loss account shows the results of operations during a certain period of time in terms of the revenues obtained and the cost incurred during the year. Financial statement is the process of selection. To make comparison between various groups to draw various conclusions. The first task of financial analysis is to select the information relevant to the decision under consideration to the total information contained in the financial statement. Profit and Loss account and other operative data. Meaning Of Financial Analysis The term financial analysis is also known as µanalysis and interpretation of financial statements¶ refers to the process of determining financial strength and weakness of the firm by establishing strategic relationship between the items of the Balance Sheet. The team financial statement includes at least two statements which the accountant prepares at the end of an accounting period. The second step is to arrange the information in a way to highlight significant relationship. Page 7 .INTRODUCTION OF THE TOPIC Meaning of Financial Statements Financial statements refer to such statements which contains financial information about an enterprise. The two statements are: - y y The Balance Sheet Profit And Loss Account They provide some extremely useful information to the extent that balance Sheet mirrors the financial position on a particular date in terms of the structure of assets. Thus the financial statement provides a summarized view of financial positions and operations of a firm. They report profitability and the financial position of the business at the end of accounting period. Features of Financial Analysis To present a complex data contained in the financial statement in simple and understandable form. To classify the items contained in the financial statement in convenient and rational groups. relation and evaluation. liabilities and owners equity.

He should know the plans and policies of the management so that he may be able to find out whether these plans are properly executed or not. Breaking down of individual components of statement according to nature. To provide useful information to mgt. The significance and utility of financial data is explained for help in decision making. If the aim is find out. To know the financial strengths.  The conclusions drawn from interpretation are presented to the management in the form of reports.  A relationship is established among financial statements with the help of tools & techniques of analysis such as ratios. common size. To know the capability of payment of interest & dividends. To know the solvency. It will involve the grouping similar data under same heads.  The financial data be given in statement should be recognized and rearranged. To know the trend of business. On the other hand. if financial position is to be studied then balance sheet analysis will be necessary.Purpose of Analysis of financial statements         To know the earning capacity or profitability. fund flow etc. Page 8 .  The extent of analysis should be determined so that the sphere of work may be decided. To make comparative study with other firms. Earning capacity of the enterprise then analysis of income statement will be undertaken. To know the efficiency of mgt.  The information is interpreted in a simple and understandable way. trends. The data is reduced to a standard form. Procedure of Financial Statement Analysis The following procedure is adopted for the analysis and interpretation of financial statements: The analyst should acquaint himself with principles and postulated of accounting.

To compare the performance 7.To enable forecasting 5. these statements may also show the change from one year to another on percentage form. Comparison and analysis of financial statements may be carried out using the following tools: Page 9 .Methods/Tools Of Financial Analysis A number of methods can be used for the purpose of analysis of financial statements.To indicate the strengths and weaknesses of the firm 6.To analyse expenses 8. The principal techniques of financial analysis are:a) b) c) d) Comparative financial statements Trend analysis Ratio analysis Cash flow analysis a. Such statements not only show the absolute figures of various years but also provide for columns to indicate to increase ort decrease in these figures from one year to another. Objectives purpose or significance of comparative financial statements 1.To simplify data 2. In addition. These are also termed as techniques or tools of financial analysis. these are called µcomparative Financial Statements¶. Such cooperative statements are of great value in forming the opinion regarding the progress of the enterprise.To indicate the trends 4.To make inter period/inter-firm comparison 3. Out of these.To analyse profits Tools for comparison of financial statements Comparative financial statement is a tool of financial analysis that depicts change in each item of the financial statement in both absolute amount and percentage term. taking the item in preceding accounting period as base. and enterprise can choose those techniques which are suitable to its requirements. Comparative Financial Statements: When financial statements figures for two or mote years are placed side-side to facilitate comparison.

These indicate the direction of movement over a long tine and help an analyst of financial statements to form an opinion as to whether favorable or unfavorable tendencies have developed. Each item of bease year is assumed to be equal to 100 and on that basis the percentage of item of each year calculated. it can be say that the relationship between two figures. Thus.N. Percentage Fraction. Trend Analysis: Trend percentage are very useful is making comparative study of the financial statements for a number of enable the analyst to have definite knowledge about the progress of the business.Comparative Balance Sheet : The comparative balance sheet shows increase and decrease in absolute terms as well as percentages . Page 10 . Anthony. expressed in arithmetical terms is called a ratio. This helps in future forecasts of various items. Rate or so many Times. It is found by dividing one number into the other.´ TYPES OF RATIOS 1) 2) 3) 4) Proportion or Pure Ratio or Simple ratio.´ ³A ratio is simply one number expressed in terms of another.The main purpose of comparative balance sheet is to measure the short.Compartative income statements facilitate the horizontal analysis since each accounting variable is analysed horizontally. A comparative analysis of balance sheets of two periods provides information regarding progress of the business firm. b.liabilities and capital. These figures often do not convey much meaning unless expressed in relation to other figures. Comparative Income Statement : Comparative income statement is prepared by taking figures of two or more than two accounting periods. Ratio Analysis: Meaning : Absolute figures expressed in financial statements by themselves are various assets . c.term and long-term solvency position of the business. ³According to R. 2. For calculating trend percentages any year may be taken as the µbase year¶.

CASH-FLOW STATEMENT A cash ± flow statement is a statement showing inflows (receipts) and outflows (payments) of cash during a particular period. Page 11 . Helpful in locating the weak spots of the business. 2. 6. Useful in Preparing the Cash Budget. It explains the Deviations of Cash from Earnings. Simplification of accounting data. Helpful in Making Dividend Decisions. Helpful in forecasting Estimate about the trend of the business Fixation of ideal standards Effective control Study of financial soundness. Useful for Short-Term Financial Planning. Objectives of Cash Flow Statement : 1. In other words. Study of the Trend of Cash Receipts and Payments.OBJECTS AND ADVANTAGES OR USES OF RATIO ANALYSIS y y y y y y y y y Helpful in analysis of financial statements. it is a summary of sources and applications of each during a particular span of time. Comparison with the Cash Budget. Helpful in comparative study. 3. 5. 7. Helpful in Ascertaining Cash Flow from various Separately. 4.

114.BALANCE SHEET OF ICICI BANK LTD.43 15.746.00 49.51 296.34 899.64 42.766.05 218.89 0.82 202.263.12 399.605.92 0.323.671.431.227.112.95 344.357.53 0.413. ------------------Mar '06 Mar '07 Mar '08 Mar '09 Mar '10 12 mths 12 mths 12 mths 12 mths 12 mths Capital and Liabilities: Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities & Provisions Total Liabilities 1.00 350.462.96 363.48 0.69 94.43 67.73 0.239.29 0.91 51.88 38.68 Rs.00 45.503.388.280.39 43.016.00 50.Mar (Rs.00 51.820.17 230.256.Mar2009.347.419.00 23.795.521.00 350. Mar 2010 As On Mar 2006.00 48.079.463.17 25.89 1.99 1.34 0.501.08 281.29 1.08 379.00 350.083.113.00 22. Cr.00 21.00 0.21 1.83 889.663.228.18 251.60 38.895.658.19 244.00 24.37 165.22 310.300.48 285.57 203.510.16 0.618.00 350.114.68 1.03 65.26 1.648. In crores) Balance Sheet ------------------.555.249. 2007.83 0.Mar2008.00 46.02 1.72 Mar '06 Mar '07 Mar '08 Mar '09 Mar '10 12 mths 12 mths 12 mths 12 mths 12 mths Page 12 .883.399.316.

399.21 249.163.85 18.574.00 24.37 29.678.359.62 7.71 3.616.205.298.42 189.14 3.987.53 8.57 1.85 3.66 16.60 71.547.64 36.514.18 371.036.57 91.927.40 146.00 20.60 17.377.11 4.62 0.11 399.00 2.94 12.Assets Cash & Balances with RBI Balance with Banks.948.11 195.663.658.31 120.895.801.33 12.892.55 22.39 5.09 3.214.375.60 225.300.388.23 270.058.01 Page 13 .34 103.23 27.36 803.980.63 7.923.07 379.93 251.430.114.443.901.08 218.509.300. Money at Call Advances Investments Gross Block Accumulated Depreciation Net Block Capital Work In Progress Other Assets Total Assets 8.706.12 3.26 7.737.108.72 147.054.71 444.642.257.78 177.536.795.56 2.71 Contingent Liabilities Bills for collection Book Value (Rs) 119.310.94 38.025.95 344.29 11.105.37 8.45 29.163.968.454.212.00 19.84 111.69 0.36 463.597.80 6.89 0.55 417.865.85 181.934.717.991.84 15.414.96 363.43 3.377.88 18.92 694.

900.48 619.036.14 1.00 5.931.082.95 29.974.281.60 4.078.638.10 35.834.962.056.667.849.971.821.12 22.95 578.592.50 5.17 Mar '09 17.78 0.274.484.725.35 16.925.957.62 18.358.878.533.75 4.32 0.092.03 0.170.99 1.994.76 39.24 30.79 6. ------------------Mar '06 Mar '07 Mar '08 Mar '09 Mar '10 12 mths 12 mths 12 mths 12 mths 12 mths Income Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses 9.18 1.23 1.93 7.02 Mar '07 23.67 544.29 2. Cr.37 Mar '10 13.00 8.03 0.70 5.55 8.616.85 39.509.66 26.78 3.159.795.PROFIT AND LOSS ACCOUNT OF ICICI BANK.788.03 Mar '06 16.409.977.855.50 2.29 6.90 5.00 10.31 25.292.79 2.93 1.780.81 28.36 Page 14 . Profit & Loss account ------------------.34 8.597.210.45 Rs.22 0.00 10.05 35.72 678.86 1.706.616.784.098.19 31.50 1.117.72 623.24 2.43 32.360.35 3.47 Mar '08 22.57 1.00 10.847.221.426.

342.00 1.01 1.42 0.00 293.83 293.65 6.70 149.01 248.809.193.436.00 0.27 3.33 106.76 110.66 0.758.00 1.44 3.04 1.37 110.00 998.377.00 1.728.867.13 -0.12 mths 12 mths 12 mths 12 mths 12 mths Net Profit for the Year Extraordionary Items Profit brought forward Total Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) Appropriations Transfer to Statutory Reserves Transfer to Other Reserves Proposed Dividend/Transfer to Govt Balance c/f to Balance Sheet Total 2.55 3.156.29 0.10 120.58 2.01 1.00 270.834.00 463.00 444.110.30 1.22 2.27 5.69 1.63 Page 15 .37 37.436.32 6.07 0.12 0.00 249.157.00 188.224.27 998.17 153.98 0.65 6.501.37 2.58 151.38 6.44 2.193.95 164.21 4.403.351.59 100.94 36.67 3.320.00 2.008.464.156.00 901.01 2.55 34.809.227.00 759.375.63 0.32 5.87 0.87 1.728.403.22 0.66 1.64 33.337.00 1.834.540.10 4.22 1.73 0.31 0.00 417.34 865.99 3.79 2.04 28.

32 38041. Cr.67 -17561.58 38041.13 29966.69 Page 16 .93 3648.61 4652.11 3857.CASH FLOW STATEMENT OF ICICI BANK Cash Flow Mar '06 ------------------.57 8907.56 17040.58 29964.98 -18362.97 -14188.82 1625.56 38873.10 -11631.55 -8074.25 20081.95 5056.90 Rs.88 6150.13 29966.32 1869. ------------------Mar '07 Mar '08 Mar '09 Mar '10 12 mths 12 mths 12 mths 12 mths 12 mths Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents 3096.04 23061.21 -7893.15 5116.97 17040.49 5345.36 1382.73 7350.22 37121.22 37357.10 683.62 4110.13 12929.

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