1

CHAPTER- I

INTRODUCTION

1.1 Background of the Study

A co-operative is an organization whose primary function are concentrated with

collection of idle money from general public and providing loan to small business and

individuals for expenditure. In other words co-operative are the important financial

institution in the local economic and needs. Normally co-operative finance collects

money from customers to saving their small part of money. Small part of money

collect and they can be invest different sector such as small business agriculture

product for which it change certain percentage of interest. The interest is higher than

interest paid by the co-operative to collected fund. Generally the interest rate of

collection of fund of co-operative higher than the bank. Because this is more risky

than bank. Co-operative organization income from their different in pays interest and

receive interest.Co-operative is an autonomous association of person united

voluntarily to meet their common economic, social and cultural needs and aspirations

through a jointly owner and democratic control enterprise. Sangam multipurpose co-

operative limited established in 2059-04-25 under the Nepalese co-operative act 2048.

It is financial institution permitted to carry out financial transaction. The office

located in triyuga municipality ward no 11 sangam tole gaighat. This institution is

manage by perfectly skilled personnel who have involved in different financial sector

and suggested provided to co-operative staff The organization aim to provided

attractive interest rate to the collected principle and provided loan to honest

professional and entrepreneurs to promote their business making than capable and
 2

independent in co-operative financial environment with the motto of. In this

organization 18th annual general meeting completed the shareholder numbers 546 and

total capital rupees 130000000.

Mission “TO be the lending co-operative organization in Nepal by providing the

finest quality financial products and service to our customer enhance our shareholder

value, contribute to the economic raise of the country.”

An income statement is a financial statement that shows you the company’s income

and expenditure. It also shows whether a company is making profit or loss for a given

period. The income statement, along with balance sheet and cash flow statement,

helps you understand the financial health of your business. The income statement is

also known as a profit and loss statement, statement of operation, statement of

financial result or income or earnings statement. This financial statement shows how

much money the business will make after all expenses are accounted for an income

statement does not reveal hidden problem, like insufficient cash flow. Income

statements are read from top to bottom and represented earning and expenses over a

period time. The resulting difference between your income and your expenses is

called your net profit. The formula of the income statement is follows:

Income –Cost of Sale= Gross margin

Gross margin-Fixed operating= Net profit

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1.2Statement of problem

Through the observation, I found many sectors among them I choose sangam

multipurpose co-operative limited sangam tole gaighat, because it will easy to collect

data and information for me. It is established near to my home in local area. So that I

choose sangam multipurpose co-operative limited for the study. I personally have

selected this topic income analysis to know the given below quarries

 What is the status of sangam multipurpose co-operative limited?

 What is the expenditure structure of sangam multipurpose co-operative

limited?

1.3 Objective of the study

 To analyze the net income of sangam multipurpose co-operative limited.

 To analyze the expenditure of sangam multipurpose co-operative limited.

1.4 Rational of the study

The income statement is the first component of our financial statement. The income

statement is a report showing the profit or loss for a business during a certain period,

as well as the income and expenses that result in this overall profit and loss. Not

surmising the income statement is known as the profit and loss statement. The

statement is primary purpose is to know the financial performance of the business.

The amount of profit or loss that a business makes during a certain period is the key

indicator of its financial performance. Following are the significant of the study

 This study will provide important information and data to stakeholder and

other related aspects.

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 It helps to know about the income of the co-operative

 This research will be important for the fourth coming students who need

some information; it will be a reference for them.

1.5 Report structure

A project work has the following chapter:

Chapter one- Introduction: background of the study, statement of problem, objective

of the study, rational of the study, report structure.

Chapter two- Literature review: conceptual review, review of previous work.

Chapter three- Research Methodology: research design, population and sample,

sources of data, data collection procedure, data analysis tools and limitations of study.

Chapter four- Result & Findings: presentation of data, major findings.

Chapter five- Summary and Conclusion

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CHAPTER- II

LITERATURE REVIEW

A literature review is a scholarly paper, which includes the knowledge including

substantive findings as well as theoretical and methodological contribution to a

particular topic. Literature reviews are secondary sources and do not report new or

original experimental and work. Literature reviews are a basis for research in nearly

every academic field. A narrow scope literature review may be included as part of

peer- reviewed journal are tide presenting new research, serving to situate the current

study within the body of the relevant literature and to provides context for the reader.

In such a case, the usually precedes the methodology and results section of the work

producing a literature review may also be part of graduate and post- graduate student

work including in the preparation of a report.

2.1 Conceptual review

A summary of a management performance are reflected in the profitability (or lack of

it) of an organization over a certain period. It itemizes the revenues and expense of

past that led to the current profit a loss and indicates what may be done to improve the

results. In contrast to a balance sheet, an income statement depicts what happened

over a month, quarter, or a year. It is based on a fundamental accounting equation

(Income= Revenue –Expenses) and shows the rate at which the owner’s equity is

changing for better or worse. Along with balance sheet and cash flow statement it
 6

forms the basic set of financial information required to manage an organization.

( Business dictionary)

According to the Mike Kappel,(2005) as a business owner, it’s important to

measure the profitability of your company. Without knowing your business’s

financial health, you risk spending more than you can afford and repeating mistakes.

Create an income statement to find your business’s profit or loss.

Companies produce a set of financial statement that reflects their business activities

and profitability for each accounting period. The three main financial statements are

the balance sheet, income statement and statement of cash flows. The cash flows

statement shows how well a company is managing its operations and any expansion

efforts. In this article, we’ll examine the difference between the balance sheet and the

income statement. ( Chris B. Murphy, 2001)

The income statement definition is a financial statement that shows a company’s

revenues and expenses over a period of time. Furthermore, it reports a company’s

financial performance over the course of an accounting period, typically a month or

quarter. Basically it starts with the money a company earns and subtracts out the

costs of running the business to get the company’s profit or loss. (James

Wilkinson,2000)

Also known as a profit or loss (P&L) statement, an income statement is a key

financial document for your business. It is clear picture that illustrates the profit and

loss of your organization. This information is important to know as it can help to

make decisions regarding spending and investing and can also help businesses to curb
 7

expenses. In conjunction with your cash flow statement and balance sheet your

income statement presents a full picture of your company’s financial health. (Quick

Books Resource Center)

2.2 Review of Previous Work

Nathan Reef, (2010), Concept of Financial Management and Performance “The

profit and loss (P&L) statement is a financial statement that summarizes the revenues,

costs and expenses incurred during a specific period, usually a fiscal year. The P&L

statement is synonymous with the income statement. These records provide

information about a company’s ability or inability to generate profit by increasing

revenue, decreasing costs or both. Some refer to the P&L statement as a statement of

profit and loss, income statement as a statement of profit and loss, income statement,

and statement of operations, statement of financial results or income earnings

statement or expense statement.”

Amanda Cameron (2012), “You’re an expert at running your business, not

analyzing financial numbers. But as a small business owner, you need to know how

your decisions affect your company. By reviewing your accounting books, you can

leverage data to grow your company. One important report to look at is the

comparative income statement. ”

Basnet, D.K. (2014), Accounting of Principles II. “Cash flow is one of the major

ways to comprehend the flow of the company. Cash in finance is a term used to

denote transaction involving the money on the property on promise of repayment,

usually at a fixed data. Credit is financial assets resulting from the delivery of cash or
 8

other by a lender to a borrower in return of obligation repays or specified data on

demand.”

Lowa State University, (2005), a farm income, as calculated by the accrual or

inventory method, represents the economic return to your contribution to the farms

business; labour, management, and net worth in land and other farm assets. Cash net

farm income also can be calculated. It shows how much cash was available for

purchasing capital assets, debt reduction, family living and income taxes.
 9

CHAPTER- III

RESEARCH METHODOLOGY

Research methodology is concern with various method uses in the process of

preparing project report. It is the systematic way to carry out research how the data

are collected and which source the research uses for getting the data is under the

research methodology. Research methodology includes research design, sources of

data, population and sample etc.

3.1 Research design

The research design is thus an integrated frame that guides the students in planning

and executing the fieldwork assignment. This research design is based on description

type.

3.2 Population and sample

Population and sample is used to while conducting is project work. There are many

co-operative in gaighat such as sangam multipurpose co-operative ltd., sagarmatha

saving & credit co-operative, kalyankari saving & credit co-operative and Tulsi

multipurpose co-operative etc. Among them sangam multipurpose co-operative

limited is selected as a sample for study by using purposive sample.

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3.3 Sources of data

There are two types of data, first primary sources of data; this data is first hand data

which are collected from the observation. This types of data is not used in report

because various restrictions. Next secondary sources of data which are obtained from

different sources. We collect secondary sources data from published notice in public

and unpublished and AGM audit report of this organization. The AGM and audit

report taken from sangam multipurpose co-operative limited.

3.4 Data Collection Procedure

Due to confidentially maintain by this organization secondary sources, especially the

annual report of the concerned co-operative is taken as main source of data collection

for purpose of study. The annual reports of concerned co-operative were obtained

from their office and AGM reports.

1.5Data analysis tools

The collection data were present with the help of following tools and tables. They

are; simple bar diagram, tabular and multiple bar diagram.

1.6Limitation of study

This study is limited with:

 Insufficient information, report, reference and reading materials.

 This study is mainly based on secondary data.

 The time period is very short.

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CHAPTER- IV

RESULT AND FINDINGS

4.1 Data Presentation

Annual reports of the company present the financial statement of the company. All

this statement taken together gives an accounting picture of the firms operation and

financial operation. Financial statements analysis is useful to investors for the

purpose of making investment decisions. It provides valuable information about the

company regarding it performance and financial position on the basis of which

investors can meaningful investment decisions.

Financial ratios related to the financial performance are presented to analyze the

performance of sangam multipurpose co-operative limited. Some important financial

ratios are calculated in the point of view of financial performance. The ratio are

designed and calculated to highlight the relationship between financial performances.

The main sources of data are secondary data related to financial performance of the

organization. Different tables and diagrams are shows to make the analysis simple

and understandable. Thus, here are some of the elements to be noted in the process of

presentation and analysis of financial position of the organization where we used

various financial tools. There are as follows:

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4.1.1 Net income analysis

Net income is your company’s total profit after deducting all business expenses.

Some people refer to net income as net earnings, net profit, or the company’s bottom

line. It’s the amount of money you have left over to pay shareholders, invest in new

projects or equipment, pay off debts, or save for future use.

The formula for calculating net income is:

Revenue – Cost of Goods Sold – Expenses= Net Income

Net income can be positive or negative. When your company has more revenues than

expenses, you have a positive net income. If your total expenses are more than your

revenues, you have a negative net income, also known as a net loss.

Table No. 4.1.1

Income analysis of Sangam Multipurpose Co-operative Limited

Year Total Revenue COGS Net Income

2074/75 6126395.61 5783356.36 343039.25
2075/76 9169269.85 6049777.40 3119492.45
2076/77 8631246.46 7745995.54 885250.92
(Annual report 2077)
 13

Figure No. 4.1.1

Income analysis of Sangam Multipurpose Co-operative Limited

Chart Title
3500000

3000000

2500000

2000000 Series 3

1500000

1000000

500000

0
2074/75 2075/76 2076/77

Above the table and graph in the fiscal year 2074/75 the co-operative is able to earn

the profit Rs. 343039.25, in 2075/76 the co-operative able to earn profit Rs.

3119492.45 it is less than previous year. In fiscal year 2076/77 the co-operative able

to earn Rs. 885250.92. Here in the context of sangam multipurpose co-operative

limited the income is fluctuating trend. The co-operative is fully operated.

4.1.2 Analysis of the expenditure

Expenditure is funds used by a business, organization, or corporation to attain new

assets, improve existing ones or reduce a liability. In other words, it’s the use of a
 14

resource in the operations of an organization. Expenditure refers to payments made or

liabilities incurred in exchange for goods or services. The term expenditure usually

refers to capital expenditure, which is usual a one- time cost and is incurred to receive

a long term benefit.

Table No.4.1.2

Expenditure of Sangam Multipurpose Co-operative Limited

Year Salary of Uniform Miscellaneous Expenditure Total

staff Expenditure
2074/75 1646360 25000 393436.41 2064796.41
2075/76 1764725 25000 485125.62 2274750.62
2076/77 1326924 35000 500047.40 1861971.4
(Annual report 2077)

Above the table the total expenditure in fiscal year 2074/75 Rs. 2064796.41, in

2075/76 Rs.2274750.62 and in 2076/77 Rs.1861971.4. The expenditure increased

it has reduced profit of organization. The organization should minimize expenditure

and maximize the profit.

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Figure No. 4.1.2

Expenditure of Sangam Multipurpose Co-operative Limited

Chart Title
2500000

2000000

1500000
Expenditure

Series 3
1000000

500000

0
2074/75 2075/76 2076/77
Fiscal Year

From the above table and graph the expenditure of the co-operative In 2074/75 is Rs.

2064796.41, in 2075/76 is Rs. 2274850.62 and in 2076/77 is Rs. 1861971.40. The

expenditure is increased. It has reduced profit of sangam multipurpose co-operative

limited.The organization should minimize the expenditure and to maximize the

income.

4.2 Major Finding

 The net income increased in the fiscal year 2074/75 to 2076/77, which

shows that the positivity of the net income of the company, co-

operative is fully operated.

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 The net income of co-operative is fluctuating trend, in 2074/75 Rs.

343039.25, in 2075/76 is Rs. 311949.45 and 2076/77 It is Rs.

885250.92.

 The expenditure of co-operative is increasing it reduce the profit of co-

operative.

 The expenditure of co-operative is fluctuating trend, in 2074/75

Rs.2064796.41, in 2075/76 it is Rs.2274850.62 and in 2076/77 it is

Rs.1861971.40.
 17

CHAPTER-V

SUMMARY AND CONCLUSION

The summary and conclusion of the study are concluded this chapter. The final and

most important task of researcher is to enlist fact finding of the study and suggestions

for further improvement. The analysis is performed with the help of the financial

tools and statistical tools which are associated with the comparisons and interpretation

under the financial analysis, related to ratios to financial performance analysis are

used and under statistical analysis some relevant statistical tools are used.

5.1 Summary

Sangam multipurpose co-operative limited setup in 2059-4-25 under the Nepalese co-

operative act.2048 is financial institution permitted to carry out financial transaction.

The office located in sangam tole gaighat, Udayapur. This institution is managed by

perfectly skilled personnel who have involved in different financial sector and

suggested provided to co-operative staff. The organization aim to provided attractive

interest rate to the collected principle and provided loan to honest professional and

entrepreneurs to promote their business making them capable and independent in

competitive financial environment with the motto of.

An income statement or profit and loss account (also referred to as a profit and loss

statement (P&L), statement of profit or loss revenue statement, statement of financial

performance, earning statement, or statement of operations) is one of the financial

statements of a firm and shows the company’s revenues and expenses during a

particular period.
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5.2 Conclusion
Conclusion are drawn on the basis of the comparison various calculation which has

calculated above of the fiscal year 2074/75, 2075/76 and 2076/77. Income statement

analysis is the process of identifying the various sources of income that is used in the

organization as an expenditure that occurred during specified accounting period.

From the above financial & data provided by the organization, the organization able

to earn profit in fiscal year 2074/75 Rs. 343039.25, in 2075/76 it is able to earn

profit Rs.311949.45 it is less than previous year and in 2076/77 the organization able

to earn profit Rs. 885250.92. The expenditure of the organization in fiscal year

2074/75 Rs. 2064796.41, in 2075/76 it is Rs. 2274850.62 and in 2076/77 it is Rs.

1861971.40. The expenditure of the organization increasing in every year, it reduces

the income of organization. The organization should minimize the expenditure and to

maximization of profit.
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BBLIOGRAPHY

Adhikari, D.R. & Pandey, D.L. (2076). Business research method, Kathmandu:

Asmita publication.

Basnet, D.K. (2012). Accounting of principles, Kathmandu: pinnacle publication.

Dhungel, R.M. (1998). Accounting for financial analysis and planning, Kathmandu:

Taleju prakashan.

Wolf &Pan. (2009).Social, science research and thesis writing. Kathmandu: Buddha

publication.

Kappel, M.(2005).Financial institution and market, New Delhi

Wilkinson, J. (2000). Principles of Management, Vikash Publication House Pvt. Delhi

Cameron, A. (1998). Project Management, New Delhi: Tata Megrow Hill Publishing
Co.Ltd.

Murphy, C.B. (2001). Basic of Financial Management, New Dilhi:Reena Publication.

Annual report of Sangam Multipurpose Co-operative Limited. (2077).

 20

APPENDIX

Sangam Multipurpose Co-operarive Limited

Gaighat, Triyuga Municipality,11 Udayapur

Balance Sheet as Ashadh 30, 2074

Capital & Liabilities Amount Assets Amount

Share capital: 3667500 Cash balance 116059.15

36675 share Rs.100
per
27983 share Rs.100
per
Fund: Bank balance 1046865.27
a)Reserve fund 239916.97
b) Other fund 1744111.76
c)Profit and loss fund ………

Loan and Borrowing ……….. Loan and advance 26426756.10

Saving 22090606.98 Investment 10000

Current liabilities and 980893.14 Other assets 18529.89

provision
Fixed assets 1104818.43

Non business assets ………..

Total 28723028.84 Total 28723028.84

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APPENDIX

Sangam Multipurpose Co-operarive Limited

Gaighat, Triyuga Municipality,11 Udayapur

Balance Sheet as Ashadh 30, 2075

Capital & Liabilities Amount Assets Amount

Share capital: 5590200 Cash balance 530968.28

55902 share Rs.100
per
36675 share Rs.100
per
Fund: Bank balance 500689.59
a)Reserve fund 284928.33
b)Other fund 594394.50
c)Profit and loss fund ………

Loan and Borrowing ……….. Loan and advance 37818772.27

Saving 29253172.95 Investment 10000

Current liabilities and 4306015.58 Other assets 10779.89

provision
Fixed assets 1157501.32

Non business assets ………..

Total 40028711.36 Total 40028711.36

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APPENDIX

Sangam Multipurpose Co-operarive Limited

Gaighat, Triyuga Municipality,11 Udayapur

Balance Sheet as Ashadh 30, 2075

Capital & Liabilities Amount Assets Amount

Share capital: 5590200 Cash balance 530968.28

55902 share Rs.100
per
36675 share Rs.100
per
Fund: Bank balance 500689.59
a)Reserve fund 284928.33
b)Other fund 594394.50
c)Profit and loss fund ………

Loan and Borrowing ……….. Loan and advance 37818772.27

Saving 29253172.95 Investment 10000

Current liabilities and 4306015.58 Other assets 10779.89

provision
Fixed assets 1157501.32

Non business assets ………..

Total 40028711.36 Total 40028711.36

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APPENDIX

Sangam Multipurpose Co-operarive Limited

Gaighat, Triyuga Municipality,11 Udayapur

Balance Sheet as Ashadh 30, 2076

Capital & Liabilities Amount Assets Amount

Share capital: 8065600 Cash balance 121908.95

80656 share Rs.100 per
(55902share Rs.100
per)
Fund: Bank balance 1651758.96
a)Reserve fund 878243.67
b) Other fund 2355843.67
c)Profit and loss fund ………

Loan and Borrowing ……….. Loan and advance 41061658.24

Saving 28386264.32 Investment 60000

Current liabilities and 4522095.65 Other assets 152015.94

provision
Fixed assets 1160705.14

Non business assets ………..

Total 44208047.23 Total 44208047.23

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APPENDIX

Sangam Multipurpose Co-operarive Limited

Gaighat, Triyuga Municipality,11 Udayapur

Balance Sheet as Ashadh 30, 2076

Capital & Liabilities Amount Assets Amount

Share capital: 8065600 Cash balance 121908.95

80656 share Rs.100 per
(55902share Rs.100
per)
Fund: Bank balance 1651758.96
a)Reserve fund 878243.67
b) Other fund 2355843.67
c)Profit and loss fund ………

Loan and Borrowing ……….. Loan and advance 41061658.24

Saving 28386264.32 Investment 60000

Current liabilities and 4522095.65 Other assets 152015.94

provision
Fixed assets 1160705.14

Non business assets ………..

Total 44208047.23 Total 44208047.23

 25

APPENDIX

Sangam Multipurpose Co-operarive Limited

Gaighat, Triyuga Municipality,11 Udayapur

Balance Sheet as Ashadh 30, 2077

Capital & Liabilities Amount Assets Amount

Share capital: 9369300 Cash balance 661956.89

93693 share Rs.100 per
(80656share Rs.100
per)
Fund: Bank balance 2376097.37
a)Reserve fund 1691441.80
b)Other fund 1318346.79

Loan and Borrowing 3445000 Loan and advance 37436036.61

Saving 27842137.15 Investment 560000

Current liabilities and 3901970.80 Other assets 84645.82

provision
Fixed assets 6449459.85

Non business assets ………..

Total 47568196.54 Total 47568196.54

 26

THE INCOME ANALYSIS OF SANGAM MULTI-PURPOSE CO-

OPERATIVE LIMITED

A Field Work Report

SUBMITTED TO:

Faculty of management Tribhuvan University

Kathmandu,Nepal

SUBMITTED BY:

Dipak Pokharel

T.U.Redg.No. 7-2-08338-0065-2016

Symbol No.8380014

Baruwa Campus Gaighat, Udayapur

In partial fulfillment of the requirement of the degree of Bachelor of Business

Studies (BBS)

Baruwa Campus, Gaighat Udayapur,Nepal

January, 2021
 27

APPENDIX-I

Sangam Multipurpose Co-operative Limited

Gaighat 11, Udayapur
Profit and Loss Account 2074 to 2077

Particulars 2074/75 2075/76 2076/77

Interest receive from loan 5040045.93 7848517.56 7169929.81

Interest receive from bank 8633.56 13439.62 27638.77

Miscellaneous income 1077716.12 1307312.67 1433678.88

Total income 6126395.61 9169269.85 8631247.46

Interest paid to saving 2465665.39 2801506.75 2697807.92

Staff expenditure 1671360 1789725 1361924

Office operation 393436.41 485125.62 500047.40

Depreciation 39971.11 53977.18 61481.08

Total expenditure 4570432.91 5130334.55 4621260.40

Profit before loan loss 1555962.91 4038935.30 4009987.06

Loan loss provision 1178619.53 572832.58 3036211.05

Profit before bonus and tax 377343.18 3466102.72 973666.01

Bonus provision 34303.93 346610.27 88525.09

Profit before tax 343039.25 3119492.45 885250.92

Income tax 178625 746231.42 209931

Net profit after tax 164414.25 2373261.03 675319.92

 28

APPENDIX-II

Sangam Multipurpose Co-operative Limited

Gaighat 11, Udayapur

Statement of Expenditure 2074 to 2077

Particulars 2074/75 2075/76 2076/77

Salary paid to staff 1646360 1764625 1326924

Uniform 25000 25000 35000

Other miscellaneous 393436.41 485125.62 500047.40

expenditure

Total expenditure 2064796.64 2274750.62 1861971.4