Table of content

Chapter No. Particulars Page no.

Acknowledgement 3
Preface 4
1 Introduction of banking 6-18
2 Company Profile 19-61
State bank of India
Bank of Baroda
3 Research methodology 83-85
4 Financial Analysis 86-96
Ratio analysis
5 Financial comparative 97-104
analysis
6 Findings, suggestions and conclusions 105-112
7 References 113

1
 INTRODUCTION OF BANKING

2
 INTRODUCTION OF BANKING

DEFINITION OF BANK

Banking Means "Accepting Deposits for the purpose of lending or Investment of deposits of
money from the public, repayable on demand or otherwise and withdraw by cheque, draft or
otherwise."

- Banking Companies (Regulation) Act,1949

ORIGIN OF THE WORD “BANK”:-

The origin of the word bank is shrouded in mystery. According to one view point the Italian
business house carrying on crude from of banking were called banchi bancheri" According to
another viewpoint banking is derived from German word "Branck" which mean heap or mound.
In England, the issue of paper money by the government was referred to as a raising a bank.

ORIGIN OF BANKING :

Its origin in the simplest form can be traced to the origin of authentic history. After recognizing
the benefit of money as a medium of exchange, the importance of banking was developed as it
provides the safer place to store the money. This safe place ultimately evolved in to financial
institutions that accepts deposits and make loans i.e., modern commercial banks.

Banking system 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.

3
For the
past three
decades
India's
banking
system has
several
outstandin
g
achieveme
nts to its
year 2008 11.65  
  2009 12.03  
  2010 10.54  
  2011 8.55  

14

12.03
12 11.65
10.54
10.12
10
8.55
8

6 net profit ratio

0
2007 2008 2009 2010 2011
year

RETURN ON NET WORTH:

It measures the profitability of the business in view of the shareholders. It judges the earning
capacity of the company and the adequacy of return on proprietor’s funds. Shareholders and
potential investors are interested in this ratio. It is calculated as below:

4
Return On Net Worth = Net Profit After Interest And Tax x 100

Shareholder’s Funds

return on
shareholder'
    s    
         
  2007 14.5    
year 2008 13.72    
  2009 15.74    
  2010 13.89    
  2011 12.71    

18

16 15.74
14.5
13.72 13.89
14
12.71
12

10

8 return on shareholder's

0
2007 2008 2009 2010 2011
year

DEBT- EQUITY RATIO:

The Debt-Equity ratio is calculated to find out the long-term financial position of the firm. This
ratio indicates the relationship between long-term debts and shareholder’s funds. The soundness
of long-term financial policies of a firm can be determined with the help of this ratio. It helps to
assess the soundness of long-term financial policies of a business. It also helps to determine the
relative stakes of outsiders and shareholders. Long-term creditors can assess the security of their
funds in a business. It indicates to what extent a firm depends upon lenders to meet its long-term
financial requirements. A low Debt-Equity ratio is considered better from the point of view of
creditors.

5
 Total
Debt to
Owner
    s Fund
     
     
  2007 13.92
year 2008 10.96
  2009 12.81
  2010 12.19
  2011 14.37

Total Debt to Owners Fund

16
13.92 14.37
14
12.81
12.19
12 10.96
10
Total Debt to Owners Fund
8

0
2007 2008 2009 2010 2011
year

FIXED ASSETS TURNOVER RATIO:

It is also called as Sales to Fixed Assets Ratio. It measures the efficient use of fixed assets. This
ratio is a measure of efficient use of fixed assets. it is calculated as:

Fixed Assets Turnover Ratio = Cost of goods sold or Sales

Net Fixed Assets

It measures the efficiency and profit earning capacity of the business. Higher the ratio, greater is
the intensive utilization of fixed assets and a lower ratio shows under utilization of the fixed
assets. This ratio has a special importance for manufacturing concerns where investment in fixed
assets, is very high and the profitability is significantly dependent on the utilization of these
assets.

    assets  

6
 turnove
r ratio
       
  2007 5.44  
year 2008 6.32  
  2009 7.2  
  2010 7.26  
  2011 7.24  

8
7.2 7.26 7.24
7
6.32
6
5.44
5

4
assets turnover ratio
3

0
2007 2008 2009 2010 2011
year

CREDIT-DEPOSIT RATIO:

This ratio is very important to assess the credit performance of the bank. The ratio shows the
relationship between the amount of deposit generated by the bank as well as their deployment
towards disbursement of loan and advances. Higher credit deposit ratio shows overall good
efficiency and performance of any banking institution.

Credits
Credit Deposit Ratio= ×100
Deposits

Credit means disbursement of advances

Deposit mean sum of fixed deposit,

Saving deposit and current deposit.

7
 credit
deposit
    ratio  
       
  2007 73.44  
year 2008 77.51  
  2009 74.97  
  2010 75.96  
  2011 79.9  

82

79.9
80

78 77.51

75.96
76
74.97 credit deposit ratio

74 73.44

72

70
2007 2008 2009 2010 2011
year

CASH DEPOSIT RATIO :

cash
deposit
    ratio  
       
  2007 6.22  
YEAR 2008 8.29  
  2009 8.37  
  2010 7.56  
  2011 8.96  

8
 10
8.96
9
8.29 8.37
8 7.56
7
6.22
6

5
cash deposit ratio
4

0
2007 2008 2009 2010 2011
YEAR

CAPITAL TURNOVER RATIO :

Income / capital employed

CAPITAL
TURNOVE
    R RATIO    
         
  2007 8.46    
YEAR 2008 8.96    
  2009 8.99    
  2010 8.62    
  2011 8.48    

9
 9.1
8.99
9 8.96

8.9

8.8

8.7
8.62
8.6
CAPITAL TURNOVER RATIO
8.5 8.46 8.48

8.4

8.3

8.2

8.1
2007 2008 2009 2010 2011
YEAR

Total assets turnover ratio:

total
assets
turnove
    r ratio
     
  2007 0.08
year 2008 0.09
  2009 0.09
  2010 0.09
  2011 0.08

10
 0.092
0.09 0.09 0.09
0.09

0.088

0.086

0.084

0.082 total assets turnover ratio

0.08 0.08
0.08

0.078

0.076

0.074
2007 2008 2009 2010 2011
year

PRICE- EARNING RATIO:

Price earning ratio = market price per share/ earning per share

Price
Earnin
    g (P/E)  
       
  2007 11.83  
Year 2008 15.38  
  2009 7.63  
  2010 14.78  
  2011 21.92  

11
 25
21.92

20

15.38
14.78
15
11.83
Price Earning (P/E)
10
7.63

0
2007 2008 2009 2010 2011
Year

Price to Book Value:

Market Value of Security/ book value of shares

Price to
Book Value
    ( P/BV)
     
  2007 1.67
year 2008 2.06
  2009 1.17
  2010 2
  2011 2.7

12
 3
2.7

2.5

2.06 2
2
1.67
1.5
1.17 Price to Book Value ( P/BV)

0.5

0
2007 2008 2009 2010 2011
year

Enterprise Value / EBIDTA

EV/
    EBIDTA
     
  2007 15.64
year 2008 14.46
  2009 13.64
  2010 15.33
  2011 17.07

EV/EBIDTA
18 17.07
16 15.64 15.33
14.46
14 13.64

12
10 EV/EBIDTA
8
6
4
2
0
2007 2008 2009 2010 2011
year

13
 BANK OF BARODA

14
INTRODUCTION

Bank of Baroda (BoB) (BSE: 532134) (Hindi: बैंक ऑफ़ बड़ौदा) is the third largest bank in India,
after the State Bank of India and the Punjab National Bank and ahead of ICICI Bank.[3] BoB is
ranked 763 in Forbes Global 2000 list. BoB has total assets in excess of Rs. 3.58 lakh crores, or
Rs. 3,583 billion, a network of over 3,409 branches and offices, and about 1,657 ATMs. It plans
to open 400 new branches in the coming year. It offers a wide range of banking products and
financial services to corporate and retail customers through a variety of delivery channels and
through its specialized subsidiaries and affiliates in the areas of investment banking, credit cards
and asset management. Its total business was Rs. 5,452 billion as of June 30.[4]

As of August 2010, the bank has 78 branches abroad and by the end of FY11 this number should
climb to 90. In 2010, BOB opened a branch in Auckland, New Zealand, and its tenth branch in
the United Kingdom. The bank also plans to open five branches in Africa. Besides branches,
BoB plans to open three outlets in the Persian Gulf region that will consist of ATMs with a
couple of people.

The Maharajah of Baroda, Sir Sayajirao Gaekwad III, founded the bank on 20 July 1908 in the
princely state of Baroda, in Gujarat. The bank, along with 13 other major commercial banks of
India, was nationalized on 19 July 1969, by the government of India.

BALANCE SHEET OF BANK OF BARODA

2007 2008 2009 2010 2011

Total Share Capital   365.53 365.53 365.53 365.53 392.81
Equity Share Capital   365.53 365.53 365.53 365.53 392.81
Share Application Money   0 0 0 0 0
Preference Share Capital   0 0 0 0 0
Reserves   8284.41 10,678.40 12,470.01 14,740.86 20,600.30
Revaluation Reserves   0 0 0 0 0
Net Worth   8649.94 11,043.93 12,835.54 15,106.39 20,993.11
Deposits   124915.98 152,034.13 192,396.95 241,044.26 305,439.48
Borrowings   1142.56 3,927.05 5,636.09 13,350.09 22,307.85
Total Debt   126058.54 155,961.18 198,033.04 254,394.35 327,747.33
Other Liabilities & Provisions   8437.70 12,594.41 16,538.15 8,815.97 9,656.73
Total Liabilities   143146.18 179,599.52 227,406.73 278,316.71 358,397.17
    2007 2008 2009 2010 2011
Assets            

Cash & Balances with RBI   6413.52 9,369.72 10,596.34 13,539.97 19,868.18
Balance with Banks, Money at
Call   11866.85 12,929.56 13490.77 21,927.09 30,065.89
Advances   83620.87 106,701.320 143985.90 175,035.29 228,676.36
Investments   34943.63 43,870.07 52445.88 61,182.38 71,260.63
Gross Block   2244.62 3,787.14 3954.13 4,266.60 4,548.16

15
 Accumulated Depreciation   1155.81 1,360.14 1644.41 1,981.84 2,248.44
Net Block   1088.81 2427.00 2309.72 2,284.76 2,299.72
Capital Work In Progress   0 0 0 0 0
Other Assets   5212.5 4301.83 4578.12 4,347.22 6,226.40

Total Assets   143146.18 179599.5 227406.73 278,316.71 358,397.180

             
Contingent Liabilities   54999.86 75364.33 64745.82 77,997.01 112,272.64
Bills for collection   12976.53 15105.51 22584.64 27,949.60 33,735.67
Book Value (Rs)   237.46 303.18 352.37 414.71 536.16
EPS 28.18 39.41 61.14 83.96 108.33
PROFIT AND LOSS OF BANK OF BARODA

PROFIT & LOSS OF BANK OF

BARODA          
IN RS.
      CR.    
  2007 2008 2009 2010 2011
Income:          
9,212.6 11,813. 15,091. 16,698. 21,885.
Interest earned 4 5 6 3 9
Other income 1,381.7 2,051.0 2,757.6 2,806.3 2,809.1
9 4 6 6 9
Total income 10,594. 13,864. 17,849. 19,504. 24,695.
4 5 2 7 1
Expenditure:          
Interest expended 5,426.5 7,901.6 9,968.1 10,758. 13,083.
6 7 7 9 7
Operating expenses 2,771.4 3,370.2 3,844.6 4,711.2 5,669.8
5 7 6 3 8
Other provision and contingencies 1,369.9 1,157.0 1,809.2 1,699.8
5 5 0 976.28 8
Total expenses 12,429. 15,622. 16,446. 20,453.
9,568.0 0 0 4 4
           
Net profit 1,026.4 1,435.5 2,227.2 3,058.3 4,241.6
6 2 0 3 8
Extraordinary items 0 0 0 0 0
Profit B/F 0 0 0 0 0
1,026.4 1,435.5 2,227.2 3,058.3 4,241.6
Total 6 2 0 3 8
           
Preference dividend 0 0 0 0 0
Equity dividend 252.46 340.94 383.56 639.26 753.35
16
Corporate dividend tax 0 0 0 0 0
Per share data:          
EPS 28.18 39.41 61.14 83.96 108.33
Equity dividend (%) 60 80 90 150 165
Book value 237.46 303.18 352.37 414.71 536.16
Appropriations          
Transfer to statutory reserve 1,136.2 1,162.0 1,387.8
271.5 444.23 3 7 7
Transfer to other reserve 1,257.0 2,100.4
502.5 650.35 707.41 0 6
Proposed dividend/ transfer to govt. 252.46 340.94 383.56 639.26 753.35
Balance C/F to balance sheet 0 0 0 0 0
           
Total 1,026.4 1,435.5 2,227.2 3,058.3 4,241.6
6 2 0 3 8

RATIO ANALYSIS OF BANK OF BARODA:

Current ratio: CURRENT ASSETS/ CURRENT LIABILITIES

Current
    Ratio
     
  2007 0.04
year 2008 0.03
  2009 0.02
  2010 0.02
  2011 0.02

17
 Current Ratio
0.045
0.04
0.04
0.035
0.03
0.03
0.025 Current Ratio
0.02 0.02 0.02
0.02
0.015
0.01
0.005
0
2007 2008 2009 2010 2011
year

QUICK RATIO:

Quick
    Ratio
     
  2007 11.29
year 2008 9.56
  2009 9.62
  2010 21.88
  2011 26.38

Quick Ratio
30
26.38
25
21.88
20

Quick Ratio
15
11.29
9.56 9.62
10

0
2007 2008 2009 2010 2011
year

18
 Earning
s Per
    Share
     
  2007 28.18
year 2008 39.41
  2009 61.14
  2010 83.96
  2011 108.33

Earnings Per Share

120
108.33
100
83.96
80
61.14 Earnings Per Share
60

39.41
40
28.18
20

0
2007 2008 2009 2010 2011
year

Total Debt to
    Owners Fund
     
  2007 14.44
year 2008 13.77
  2009 14.99
  2010 15.96
  2011 14.55

19
 Total Debt to Owners Fund
16.5
15.96
16

15.5
14.99
15
14.44 14.55 Total Debt to Owners Fund
14.5

14 13.77
13.5

13

12.5
2007 2008 2009 2010 2011
year

Cash Deposit
    Ratio
     
  2007 4.46
year 2008 5.7
  2009 5.8
  2010 5.57
  2011 6.11

Cash Deposit Ratio

7
6.11
6 5.7 5.8
5.57

5
4.46
4 Cash Deposit Ratio

0
2007 2008 2009 2010 2011
year

20
 Credit
    Deposit Ratio
     
  2007 65.67
year 2008 68.72
  2009 72.78
  2010 73.6
  2011 73.87

Credit Deposit Ratio

76
73.6 73.87
74
72.78
72

70
68.72
Credit Deposit Ratio
68

66 65.67

64

62

60
2007 2008 2009 2010 2011
year

Asset
Turnover
    Ratio
     
  2007 4.25
year 2008 3.47
  2009 4.2
  2010 4.48
  2011 5.25

21
 Asset Turnover Ratio
6
5.25
5
4.48
4.25 4.2
4
3.47
Asset Turnover Ratio
3

0
2007 2008 2009 2010 2011
year

Total Assets
    Turnover Ratios
     
  2007 0.07
Year 2008 0.08
  2009 0.08
  2010 0.08
  2011 0.08

Total Assets Turnover Ratios

0.082
0.08 0.08 0.08 0.08
0.08
0.078
0.076
0.074 Total Assets Turnover Ratios
0.072
0.07
0.07
0.068
0.066
0.064
2007 2008 2009 2010 2011
year

22
 Total Income /
Capital
    Employed(%)
     
  2007 7.83
year 2008 8.57
  2009 8.51
  2010 7.86
  2011 7.75

Total Income / Capital Employed(%)

8.8

8.6 8.57
8.51
8.4

8.2
Total Income / Capital
8 Employed(%)
7.83 7.86
7.8 7.75

7.6

7.4

7.2
2007 2008 2009 2010 2011
year

Net Profit /
    Total Funds
     
  2007 0.8
year 2008 0.89
  2009 1.09
  2010 1.21
  2011 1.33

23
 Net Profit / Total Funds
1.4 1.33
1.21
1.2
1.09
1
0.89
0.8
0.8 Net Profit / Total Funds

0.6

0.4

0.2

0
2007 2008 2009 2010 2011
year

Dividend Per
    Share
     
  2007 6
Year 2008 8
  2009 9
  2010 15
  2011 16.5

Dividend Per Share

18
16.5
16 15
14
12
10 9 Dividend Per Share
8
8
6
6
4
2
0
2007 2008 2009 2010 2011
year

24
PRICE- EARNING RATIO:

Price earnings ratio = market price per share/ earnings per share

PRICE-
EARNIN
    G  
       
  2007 7.93  
YEAR 2008 7.49  
  2009 3.95  
  2010 7.87  
  2011 9.15  

10
9.15
9
7.93 7.87
8 7.49
7

5
3.95 PRICE- EARNING
4

0
2007 2008 2009 2010 2011
YEAR

PRICE- BOOK VALUE

Market Value of Security/ book value of shares

PRICE-
BOOK
VALU
    E    
  2007 0.91    
YEAR 2008 0.94    
  2009 0.67    

25
  2010 1.55    
  2011 1.8    

2
1.8
1.8

1.6 1.55

1.4

1.2
0.94000000000000
1 0.91 1
PRICE-BOOK VALUE
0.8 0.67000000000000
3
0.6

0.4

0.2

0
2007 2008 2009 2010 2011
YEAR

ENTERPRISE TO EBIDTA:

EV/
    EBIDTA  
  2007 15.9  
YEA
R 2008 13.93  
  2009 14.01  
  2010 15.93  
  2011 16.64  

26
 17
16.64
16.5

16 15.9 15.93

15.5

15

14.5 EV/EBIDTA

13.93 14.01
14

13.5

13

12.5
2007 2008 2009 2010 2011
YEAR

TREND ANALYSIS

Trend Analysis is the practice of collecting information and attempting to spot a pattern, or
trend, in the information. In some fields of study, the term "trend analysis" has more formally-
defined meaning.

Although trend analysis is often used to predict future events, it could be used to estimate
uncertain events in the past, such as how many ancient kings probably ruled between two dates,
based on data such as the average years which other known kings reigned.

TREND ANALYSIS OF STATE BANK OF

INDIA

BASE YEAR 2006-2007

percentage (%)
figures
200 200 201
  7 2008 9 0 2011
           
deposits 100 123 170 185 214
advance
s 100 124 161 187 224
net
profit 100 148 201 202 162

27
 250

200

150
deposits
advances
100 net profit

50

0
2007 2008 2009 2010 2011

INTERPRETATION:

 There is a continuous increase in deposits

 There is a increase of advances

 There is a increase in net profits till 2010 but there is a fall in 2011

The overall performance of the bank is satisfactory.

TREND ANALYSIS OF BANK OF BARODA

Bank of Baroda

Base year 2006-2007

In percentage(%) figures

2007 2008 2009 2010 2011

28
deposits 100 122 154 193 245
advances 100 128 172 209 273
net 100 140 217 298 413
profit

450

400

350

300

250
deposits
advances
200 net profit

150

100

50

0
2007 2008 2009 2010 2011

INTERPRETATION:

Deposits:-

The trend shows that the deposits are increasing from 2007-2011

Advances:-

The trend of advances shows that it is increasing in those four years 2008-2011

Net profit:-

The trend of net profit shows the increase from 2008-2011

BETA ANALYSIS

A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the

market as a whole. Beta is used in the capital asset pricing model (CAPM), a model that
calculates the expected return of an asset based on its beta and expected market returns..
Also known as "beta coefficient".
29
 BETA VALUATION OF STATE BANK OF INDIA

  1 2 3 4 5 6 7 8  
return- return
averag of SBI-
e of Averag covarian
RETURN RETUR return varianc e of ce of
OF N OF of e of return sensex
MONTH SENSEX SBI SENSEX SBI sensex sensex of SBI and SBI  
3,233.
10-Sep 20,069.12 20              
3,151.
10-Oct 20,032.34 20 0.00 -0.03 0.01 0.0001 0.01 0.0001  
2,994.
10-Nov 19,521.25 10 -0.03 -0.05 -0.01 0.0002 -0.01 0.00014  
2,811. -
10-Dec 20,509.09 05 0.05 -0.06 0.06 0.0040 -0.02 0.001407  
2,641.
11-Jan 18,327.76 05 -0.11 -0.06 -0.09 0.0088 -0.02 0.002018  
2,632. -
11-Feb 17,823.40 00 -0.03 0.00 -0.01 0.0002 0.04 0.000525  
2,767.
11-Mar 19,445.22 90 0.09 0.05 0.10 0.0108 0.09 0.009392  
2,805. -
11-Apr 19,135.96 60 -0.02 0.01 0.00 0.0000 0.05 0.000167  
2,297.
11-May 18,503.28 80 -0.03 -0.18 -0.02 0.0004 -0.14 0.00289  
2,405.
11-Jun 18,845.87 95 0.02 0.05 0.03 0.0010 0.09 0.002686  
2,342. -
11-Jul 18,197.20 00 -0.03 -0.03 -0.02 0.0005 0.01 0.000268  
1,974.
11-Aug 16,676.75 50 -0.08 -0.16 -0.07 0.0050 -0.12 0.008358  
1,945.
11-Sep 16,933.83 55 0.02 -0.01 0.03 0.0008 0.02 0.000683  
                   
AVERAGE
RETURN     -0.01 -0.04   0.0026   0.00200  
                   
COVARIAN 0.001995
CE 59                

30
                   
0.002642
VARIANCE 95                
                   
BETA 0.755062                

BETA VALUATION OF BANK OF BARODA

  1 2 3 4 5 6 7 8  
return
- return
RETUR avera -
N OF ge of avera covarian
BANK RETUR BANK return ge of ce of
OF N OF OF on variance return sensex
MONT BAROD SENSE BAROD sense of on and
H SENSEX A X A x sensex BOB BOB  
10-Sep 20,069.12 872.8              
0.010 0.00011 0.165
10-Oct 20,032.34 1,011.00 -0.0018 0.1583 9 9 0 0.0018  
- -
0.012 0.00016 0.072
10-Nov 19,521.25 937.75 -0.0255 -0.0725 8 4 5 0.0009  
-
0.063 0.044
10-Dec 20,509.09 896.5 0.0506 -0.0440 3 0.00401 0 -0.003  
- -
0.093 0.00876 0.030
11-Jan 18,327.76 869.15 -0.1064 -0.0305 6 8 5 0.0029  
-
0.014 0.00021 0.002
11-Feb 17,823.40 870.85 -0.0275 0.0020 8 9 0 -3E-05  
0.103 0.01075 0.106
11-Mar 19,445.22 963.15 0.0910 0.1060 7 7 0 0.011  
- -
0.003 1.01E- 0.053
11-Apr 19,135.96 912.15 -0.0159 -0.0530 2 05 0 0.0002  
- -
11- 0.020 0.00041 0.053
May 18,503.28 863.4 -0.0331 -0.0534 3 4 4 0.0011  
0.031 0.00097 0.009
11-Jun 18,845.87 871.9 0.0185 0.0098 2 6 8 0.0003  
11-Jul 18,197.20 878.3 -0.0344 0.0073 - 0.00047 0.007 -0.00016  

31
 0.021
7 1 3
- -
0.070 0.00501 0.161
11-Aug 16,676.75 736.6 -0.0836 -0.1613 8 8 3 0.0114  
0.028 0.00079 0.051
11-Sep 16,933.83 774.8 0.0154 0.0519 1 2 9 0.0015  
                   
AVERAGE 0.00264
  RETURN   -0.0127 -0.0066   3   0.0023  
                   
COVARIAN
  CE   0.00234            
                   
0.00264
  VARIANCE   3            
                   
0.88438
  BETA   5            

RATIO ANALYSIS

A tool used by individuals to conduct a quantitative analysis of information in a company's

financial statements. Ratios are calculated from current year numbers and are then compared to
previous years, other companies, the industry, or even the economy to judge the performance of
the company. Ratio analysis is predominately used by proponents of fundamental analysis.

There are many ratios that can be calculated from the financial statements pertaining to a
company's performance, activity, financing and liquidity. Some common ratios include the price-
earnings ratio, debt-equity ratio, earnings per share, asset turnover and working capital.

SUSTAINABLE EARNINGS OF BANK OF BARODA

  IN RS. CR.        
           
200903
  201103 (12) 201003 (12) (12) 200803 (12) 200703 (12)
           
INCOME :  
           
Total 24695.1 19504.7 17876.11 13892.18 10438.12
           

32
 II. Expenditure  
           
Total 20453.42 16446.37 15648.91 12456.66 9411.66
           
Fringe Benefit tax 0 0 0 11 7.5
Deferred Tax 0 0 0 -3.12 -3.11
Reported Net Profit 4241.68 3058.33 2227.2 1435.52 1026.46
Extraordinary Items -0.12 56.12 62.29 0.22 8.01
Adjusted Net Profit 4241.8 3002.21 2164.91 1435.3 1018.45

Average of Adjusted net profit for the year 2009,2010,2011

2009 2164.91
2010 3002.21
2011 4241.8

Sum = 9408.92

Average = 3136.30

Standard deviation 1044.466

Rounding off 1044

CRAR% OF BANK OF BARODA:

20110 20100 20090

3 3 3
CRAR(%)
20110 20100 20090
Year End 3 3 3
CRAR - Tier I (%) 9.99 9.2 8.49
CRAR - Tier II (%) 4.53 5.16 5.56
Total CRAR (%) 14.52 14.36 14.05

33
 Total
CRAR
    (%)  
  2009 14.05  
year 2010 14.36  
  2011 14.52  

14.6
14.52
14.5

14.4 14.36

14.3

14.2
Total CRAR (%)
14.1
14.05

14

13.9

13.8
2009 2010 2011
year

34
 RESEARCH METHODOLOGY

35
 RESEARCH TOPIC

“THE COMPARATIVE STUDY OF FINANCIAL PERFORMANCE OF STATE BANK

OF INDIA AND BANK OF BARODA.”

OBJECTIVE OF THE STUDY:-

1. To know the strength and weakness of State Bank Of India and Bank Of Baroda through
Ratio analysis.
2. To evaluate the performance of the companies.
3. To understand the liquidity, profitability and efficiency positions of the companies.
4. To make comparison between the ratios during different periods.

INTRODUCTION

Financial Management is the specific area of finance dealing with the financial decision
corporations make, and the tools and analysis used to make the decisions. The discipline as a
whole may be divided between long-term and short-term decisions and techniques. Both share
the same goal of enhancing firm value by ensuring that return on capital exceeds cost of capital,
without taking excessive financial risks.
Capital investment decisions comprise the long-term choices about which projects receive
investment, whether to finance that investment with equity or debt, and when or whether to pay
dividends to shareholders.
Short-term corporate finance decisions are called working capital management and deal with
balance of current assets and current liabilities by managing cash, inventories, and short-term
borrowings and lending (e.g., the credit terms extended to customers). Corporate finance is
closely related to managerial finance, which is slightly broader in scope, describing the financial
techniques available to all forms of business enterprise, corporate or not.

RESEARCH METHODOLOGY

The conclusive research is being used to study the comparison of the companies.

36
  Data collection:
Secondary data is being taken
Websites

Outcomes of the study:

1. With this analysis we come to know about the strength and weakness of State Bank Of
India and Bank Of Baroda through Ratio analysis.
2. To evaluate the performance of the companies.
3. To understand the liquidity, profitability and efficiency positions of the companies.
4. To make comparison between the ratios during different periods.

Limitation of the study:

The study is done in Kanpur

Study is constrained to only the comparison of State Bank Of India and Bank Of Baroda.

TOOLS USED:

Comparative analysis

Ratio analysis

Trend analysis

Beta valuation

Sustainable earnings

Basel-II CRAR % capital requirement

Cash Flow Statement Analysis

STATISTICAL TOOL:

CAPITALINE

SPSS

37
FINANCIAL ANALYSIS

38
Introduction to the topic

RATIO ANALYSIS
FINANCIAL ANALYSIS
Financial analysis is the process of identifying the financial strengths and weaknesses of the firm
and establishing relationship between the items of the balance sheet and profit & loss account.
Financial ratio analysis is the calculation and comparison of ratios, which are derived from the
information in a company’s financial statements. The level and historical trends of these ratios
can be used to make inferences about a company’s financial condition, its operations and
attractiveness as an investment. The information in the statements is used by
Trade creditors, to identify the firm’s ability to meet their claims i.e. liquidity position of the
company.
Investors, to know about the present and future profitability of the company and its financial
structure.
Management, in every aspect of the financial analysis. It is the responsibility of the
management to maintain sound financial condition in the company.

RATIO ANALYSIS
The term “Ratio” refers to the numerical and quantitative relationship between two items or
variables. This relationship can be exposed as
Percentages
Fractions
Proportion of numbers
Ratio analysis is defined as the systematic use of the ratio to interpret the financial statements. So
that the strengths and weaknesses of a firm, as well as its historical performance and current
financial condition can be determined. Ratio reflects a quantitative relationship helps to form a
quantitative judgment.
STEPS IN RATIO ANALYSIS
The first task of the financial analysis is to select the information relevant to the decision
under consideration from the statements and calculates appropriate ratios.
To compare the calculated ratios with the ratios of the same firm relating to the pas6t or with
the industry ratios. It facilitates in assessing success or failure of the firm.
Third step is to interpretation, drawing of inferences and report writing conclusions are
drawn after comparison in the shape of report or recommended courses of action.

BASIS OR STANDARDS OF COMPARISON

39
Ratios are relative figures reflecting the relation between variables. They enable analyst to draw
conclusions regarding financial operations. They use of ratios as a tool of financial analysis
involves the
comparison with related facts.

NATURE OF RATIO ANALYSIS

Ratio analysis is a technique of analysis and interpretation of financial statements. It is the
process of establishing and interpreting various ratios for helping in making certain decisions. It
is only a means of
understanding of financial strengths and weaknesses of a firm. There are a number of ratios
which can be calculated from the information given in the financial statements, but the analyst
has to select the appropriate data and calculate only a few appropriate ratios. The following are
the four steps
involved in the ratio analysis.
Selection of relevant data from the financial statements depending upon the objective of the
analysis.
Calculation of appropriate ratios from the above data.
Comparison of the calculated ratios with the ratios of the same firm in the past, or the ratios
developed from projected financial statements or the ratios of some other firms or the
comparison with ratios of the
industry to which the firm belongs.
INTERPRETATION OF THE RATIOS
The interpretation of ratios is an important factor. The inherent limitations of ratio analysis
should be kept in mind while interpreting them.
The impact of factors such as price level changes, change in accounting policies, window
dressing etc., should also be kept in mind when attempting to interpret ratios.

IMPORTANCE OF RATIO ANALYSIS

Aid to measure general efficiency
Aid to measure financial solvency
Aid in forecasting and planning
Facilitate decision making
Aid in corrective action
Aid in intra-firm comparison
Act as a good communication
Evaluation of efficiency
Effective tool

LIMITATIONS OF RATIO ANALYSIS

Differences in definitions
Limitations of accounting records
Lack of proper standards
No allowances for price level changes
Changes in accounting procedures
Quantitative factors are ignored
Limited use of single ratio
Background is over looked
40
Limited use
Personal bias
IN THE VIEW OF FUNCTIONAL CLASSIFICATION THE RATIOS
ARE
1. Liquidity ratio
2. Leverage ratio
3. Activity ratio
4. Profitability ratio

1. LIQUIDITY RATIOS

Liquidity refers to the ability of a concern to meet its current obligations as & when there
becomes due. The short term obligations of a firm can be met only when there are sufficient
liquid assets. The short term obligations are met by realizing amounts from current, floating (or)
circulating assets The current assets should either be calculated liquid (or) near liquidity. They
should be convertible into cash for paying obligations of short term nature. The sufficiency (or)
insufficiency of current assets should
be assessed by comparing them with short-term current liabilities. If current assets can pay off
current liabilities, then liquidity position will be satisfactory.
To measure the liquidity of a firm the following ratios can be
calculated
Current ratio
Quick (or) Acid-test (or) Liquid ratio
Absolute liquid ratio (or) Cash position ratio

(a) CURRENT RATIO:

Current ratio may be defined as the relationship between current assets and current liabilities.
This ratio also known as Working capital ratio is a measure of general liquidity and is most
widely used to
make the analysis of a short-term financial position (or) liquidity of a firm.

Current ratio= current assets/ current liabilities

Components of current ratio:
Current Assets Current Liabilities
CuCash in handrrent AcunnnnSSETS Outstanding expenses
Cash at bank Bank overdraft
Bills receivable Bill payable
Inventories Short term advances
Work-in-progress Sundry creditors
Marketable securities Dividend payable
Short-term investments Income-tax payable
Sundry debtors
Prepaid expenses

41
(b) QUICK RATIO
Quick ratio is a test of liquidity than the current ratio. The term liquidity refers to the ability of a
firm to pay its short-term obligations as & when they become due. Quick ratio may be defined as
the relationship
between quick or liquid assets and current liabilities. An asset is said to be liquid if it is
converted into cash with in a short period without loss of value.

Quick or liquid assets

Quick Ratio= quick or liquid assets/ current liabilities

Components
Quick Assets Current liabilities
Cash in hand Outstanding or accrued expenses
Cash at bank Bank overdraft
Bills receivable Bills payable
Sundry debtors Short term advances
Marketable securities Sundry creditors
Temporary investments Dividend payable
Income tax payable
(c) ABSOLUTE LIQUID RATIO
Although receivable, debtors and bills receivable are generally
more liquid than inventories, yet there may be doubts regarding their
realization into cash immediately or in time. Hence, absolute liquid ratio
should also be calculated together with current ratio and quick ratio so as to
exclude even receivables from the current assets and find out the absolute
liquid assets.
Absolute liquid ratio = Absolute liquid assets/Current liabilities

Absolute liquid assets include cash in hand etc. The acceptable

forms for this ratio is 50% (or) 0.5:1 (or) 1:2 i.e., Rs.1 worth absolute liquid
assets are considered to pay Rs.2 worth current liabilities in time as all the creditors are nor
accepted to demand cash at the same time and then cash
may also be realized from debtors and inventories.
Components:
Absolute liquid assets Current liabilities
Cash in hand Outstanding or accrued expenses
Cash in bank Bank overdraft
Interest on fixed deposits Bills payable
Dividend payable
Sundry creditors
Short term advances
Income tax payable

42
2. LEVERAGE RATIOS
The leverage or solvency ratio refers to the ability of a concern
to meet its long term obligations. Accordingly, long term solvency ratios
indicate firm’s ability to meet the fixed interest and costs and repayment
schedules associated with its long term borrowings.
The following ratio serves the purpose of determining the
solvency of the concern.
· Proprietory ratio
(a) PROPRIETORY RATIO
A variant to the debt-equity ratio is the proprietary ratio which
is also known as equity ratio. This ratio establishes relationship between
share holders funds to total assets of the firm.
Proprietory ratio = Shareholders funds/ Total assets
Shareholder fund Total Assets
Share capital Fixed assets
Reserve& surplus Current assets
Cash in hand
Cash at bank
Bills receivable
Inventories
Marketable securities
Short term investment
Sundry debtors
Prepaid expenses
3. ACTIVITY RATIOS
Funds are invested in various assets in business to make sales
and earn profits. The efficiency with which assets are managed directly
effect the volume of sales. Activity ratios measure the efficiency (or)
effectiveness with which a firm manages its resources (or) assets. These
ratios are also called “Turn over ratios” because they indicate the speed with which assets are
converted or turned over into sales.
Working capital turnover ratio
Fixed assets turnover ratio
Capital turnover ratio
Current assets to fixed assets ratio
(a) WORKING CAPITAL TURNOVER RATIO
Working capital of a concern is directly related to sales.
Working capital= current assets – current liabilities
It indicates the velocity of the utilization of net working capital.

This indicates the no. of times the working capital is turned over in the

course of a year. A higher ratio indicates efficient utilization of working

43
capital and a lower ratio indicates inefficient utilization.

Working capital turnover ratio=cost of goods sold/workingcapital.

Components of working capital:

Current assets Current liabilities

Cash in hand Outstanding or accrued expenses

Cash at bank Bank overdraft

Bills receivable Bills payable

Prepaid expenses Short term advances

Short term investments Sundry creditors

Inventories Dividend payable

Work in progress Income tax payable

Marketable securities

Sundry debtors

(b) FIXED ASSETS TURNOVER RATIO

It is also known as sales to fixed assets ratio. This ratio measures the efficiency and profit
earning capacity of the firm. Higher the
ratio, greater is the intensive utilization of fixed assets. Lower ratio means
under-utilization of fixed assets.
Fixed assets turnover ratio = Cost of Sales/ Net fixed assets
Cost of Sales = Income from Services
Net Fixed Assets = Fixed Assets - Depreciation

(c) CAPITAL TURNOVER RATIOS

Sometimes the efficiency and effectiveness of the operations
are judged by comparing the cost of sales or sales with amount of capital
invested in the business and not with assets held in the business, though in
both cases the same result is expected. Capital invested in the business may be classified as long-
term and short-term capital or as fixed capital and working capital or Owned Capital and Loaned
Capital. All Capital
Turnovers are calculated to study the uses of various types of capital.

Capital turnover ratio= cost of goods sold/capital employed

44
Capital employed = capital+ reserves& surplus

Cost of goods sold = income from services

(d) CURRENT ASSETS TO FIXED ASSETS RATIO

This ratio differs from industry to industry. The increase in the

ratio means that trading is slack or mechanization has been used. A decline in the ratio means
that debtors and stocks are increased too much or fixed assets are more intensively used. If
current assets increase with the corresponding increase in profit, it will show that the business is
expanding.
Current assets to fixed assets ratio= current assets/ fixed assets
Current assets Fixed assets

Cash in hand Plant

Cash at bank Machinery

Bills receivables Land

Short term investment Building

Inventories Vehicles

Sundry debtors

Work in progress

Marketable securities

4. PROFITABILITY RATIOS

The primary objectives of business undertaking are to earn profits. Because profit is the engine,
that drives the business enterprise.
Net profit ratio
Return on total assets
Reserves and surplus to capital ratio
Earnings per share
Operating profit ratio
Price – earning ratio
Return on investments
(a) NET PROFIT RATIO
Net profit ratio establishes a relationship between net profit (after tax) and sales and indicates the
efficiency of the management in manufacturing, selling administrative and other activities of the
firm.

45
Net profit after tax = net profit-( depreciation+ interest+ income tax)

Net sales = income from services

Net profit ratio = net profit after tax/ net sales

It also indicates the firm’s capacity to face adverse economic

conditions such as price competitors, low demand etc. Obviously higher the
ratio, the better is the profitability.

(b) RETURN ON TOTAL ASSETS

Profitability can be measured in terms of relationship between

net profit and assets. This ratio is also known as profit-to-assets ratio. It

measures the profitability of investments. The overall profitability can be

known.

Returns on assets = net profit / total assets

Net profit = earnings before interest and tax

Total assets = current assets+ fixed assets

(c) RESERVES AND SURPLUS TO CAPITAL RATIO

It reveals the policy pursued by the company with regard to
growth shares. A very high ratio indicates a conservative dividend policy
and increased ploughing back to profit. Higher the ratio better will be the
position.

Reserves& surplus to capital ratio = reserves& surplus/capital

(d) EARNINGS PER SHARE

Earnings per share is a small verification of return of equity and
is calculated by dividing the net profits earned by the company and those
profits after taxes and preference dividend by total no. of equity shares.
46
Earning per share = net profit after tax/ no. of equity shares

The Earnings per share is a good measure of profitability when

compared with EPS of similar other components (or) companies, it gives a
view of the comparative earnings of a firm.

(e) OPERATING PROFIT RATIO

Operating ratio establishes the relationship between cost of goods sold and other operating
expenses on the one hand and the sales on
the other.

Operating ratio = operating cost / net sales

However 75 to 85% may be considered to be a good ratio in case of a manufacturing under

taking.
Operating profit ratio is calculated by dividing operating profit
by sales.

Operating profit = net sales – operating cost

Operating profit ratio = operating profit / sales

(f) PRICE - EARNING RATIO

Price earning ratio is the ratio between market price per equity
share and earnings per share. The ratio is calculated to make an estimate of appreciation in the
value of a share of a company and is widely used by
investors to decide whether (or) not to buy shares in a particular company.
Generally, higher the price-earning ratio, the better it is. If the
price earning ratio falls, the management should look into the causes that
have resulted into the fall of the ratio.

Price earning ratio = market price per share/ earning per share

Market price per share = capital + reserves& surplus / no. of equity shares

Earning per share = earnings before interest and tax / no. of equity shares

(g) RETURN ON INVESTMENTS

47
Return on share holder’s investment, popularly known as Return on investments (or) return on
share holders or proprietor’s funds is
the relationship between net profit (after interest and tax) and the
proprietor’s funds.

Return on shareholder’s investment = net profit after interest and tax / shareholder’s fund

The ratio is generally calculated as percentages by multiplying

the above with 100.

48
 FINANCIAL COMPARATIVE ANALYSIS

49
 BALANCE SHEET OF STATE BANK OF INDIA

FOR THE YEAR ENDING ON MARCH 2007-2011

IN RS CR.

2007- 2008- 2009-2010 2010-

2008 2009 2011
Absolute % Absolute % Absolute % Absolute %
change change change change change change change chang
e
Capital &
Liabilities
Capital 105.17 19.98 3.41 0.0054 0.00 0.00 0.12 0.018
Reserve& 17628.83 57.28 8910.91 18.41 8001.5 13.96 (963.28) (1.47)
surplus
deposits 101882.8 23.39 204669.1 38.08 62043.1 8.36 129816.5 16.14
5 9 8
borrowings 12024.07 30.28 1986.27 3.83 49297.92 91.77 16557.36 16.07
Other 23320.04 38.83 27335.27 32.79 (30360.30 (27.42 24911.69 31.009
liabilities and ) )
provisions
TOTAL 154961.0 27.35 242905.7 33.66 88981.65 9.226 170322.4 16.16
CAPITAL 6 7 7
AND
LIABILITIE
S
2007-08 2008-09 2009-10 2010-11
Absolute % Absolute % Absolute % Absolute %
change change change change change change change chang
e
Assets:
Investments 40352.39 27.055 86452.69 45.62 9836.11 3.56 9810.5 3.43
Advances 79431.71 23.54 125735 30.16 89410.95 16.48 124805.3 19.75
Fixed assets (314.22) (0.070 (543.32) (0.13) 543.32 0.15 314.22 0.076
)
Capital Work (37.05) (0.11) (31.74) (0.107 31.74 0.1204 37.05 0.1255
In Progress )
Current assets (8665.09) (0.19) 2620.51 0.074 (2620.51) (0.069 8665.09 0.24
)
TOTAL 154961.0 27.35 242905.7 33.66 88981.65 9.226 170322.4 16.16
ASSETS: 6 7 7

50
 Interpretation :

The capital of bank increased by 19.98%in 07-08, 0.0054% in 08-09, 0.018% in 10-11.

There is no change in capital of the bank in the year 09-10

There is a huge fluctuation in the rate of increasing in reserves& surplus .

The bank is utilizing its reserves &surplus in an effective manner.

In 07-08 deposits increase by 23.39%, 08-09 it increase by 38.08%, 8.36% in 09-10,16.14% in

10-11.

There is a huge fluctuating rate of increase . in 08-09 it had fluctuate to 3.83%.

The investment in 10-11 has increased with a low rate as compared to the preceding
years .27.55% in 07-08,45.62% in 08-09,3.56% in 09-10,3.43% in 10-11.

The advances rose by 23.54% in 07-08,30.16% in 08-09,16.48% in 09-10, 19.75% in 10-11.

There has been a consistent decline in fixed assets in 07-08 and 08-09 0.070% ,0.13%
respectively. Increased by 0.15% in 09-10, 0.076% in 10-11.

There is a fall of current assets 0.19% in 07-08 mainly due to the repayment of deposits.0.074%
in 08-09, subsequent fall of current assets 0.069% in 09-10, and increase of 0.24% in 10-11.

PROFIT AND LOSS OF STATE BANK OF INDIA FOR THE YEAR ENDING ON
MARCH 2007-2011 IN RS CR.

Particulars 2007-08   2008-09   2009-10 2010-11

absolute % absolute % absolute %
  change change change change change % change absolute change change
     
INCOME:    
operating income 11410.95  0.24 18131.04  0.31 9482.29 0.12 10367.38 0.12
EXPENDITURE:    
interest expended 8492.26  0.36 10986.21  0.18 4407.19 0.10 1545.48 0.032
3514.11
operating
expenses 1357.77  0.10  0.24 6817.35 0.37 6489.87 0.26
9223.14

total expenses  0.21 15738.93 0.30 9437.47 0.14 12163.1 0.15

provision and
contingencies -626.89 -0.10 1238.61 0.24 -1787.07 0.14 12163.1 0.15
net profit of the
year 2187.81 0.48 2392.11 0.35 44.82 0.004914 -1795.68 -0.19
extraordinary
items 0 0 0 0 0 0 0 0

51
 profit brought
forward 0 0 0 0 0 0 0 0
total profit/(loss): 2187.81 0.48 2392.11 0.35 44.82 0.004914 -1795.68 -0.19
INTERPRETATION:

Net Profit Of The Year: it shows a fluctuating trend i.e., increased by 48% in2007-08,35% in
2008-09,0.49% in 2009-10 and decline by 19% in 2010-11due to increased tax liability.
Interest Expended: it increases from 36% in 2007-08,18% in 2008-09, 10% in 2009-10 and
3.20% in 2010-11.

BALANCE SHEET OF BANK OF BARODA FOR THE YEAR ENDING ON MARCH

2007-2011 IN RS CR.

                 
2007- 2008- 2009- 2010-
  2008   2009   2010   2011  
absolute % absolute % absolute % absolute %
  change change change change change change change change
capital &
liabilities:                
0.07463
Capital 0 0 0 0 0 0 27.28 1
reserves& 0.28897 0.16777 0.18210 0.39749
surplus 2393.99 5 1791.61 9 2270.85 5 5859.44 6
27118.1 0.21709 40362.8 0.26548 48647.3 0.25284 64395.2 0.26715
Deposits 5 1 2 5 1 9 2 1
2.43706 0.43519 1.36867 0.67098
Borrowings 2784.49 2 1709.04 7 7714 9 8957.76 9
0.49263 0.31313 - - 0.09536
other liabilities 4156.71 5 3943.74 4 7722.18 0.46693 840.76 8
TOTAL
LIABILITIE 36453.3 0.25465 47807.2 0.26618 50909.9 0.22387 80080.4 0.28773
S: 4 8 1 8 8 2 6 1
2007-08 2008-09 2009-10 2010-11
absolute % absolute % absolute % absolute %
  change change change change change change change change
ASSETS
0.25545 0.19548 0.16658 10078.2 0.16472
Investments 8926.44 3 8575.81 2 8736.5 1 5 5
23080.4 0.27601 37284.5 0.34942 31049.3 0.21564 53641.0 0.30645
Advances 5 3 8 9 9 2 7 9
fixed assets 1338 1.2 (117) (0.05) (25) (0.01) 15 0.01
capital work in
progress 0 0 0 0 0 0 0 0
Total assets 36453.3 0.25465 47807.2 0.26618 50909.9 0.22387 80080.4 0.28773

52
 2 8 3 8 8 2 7 1
INTERPRETATION:

The capital of the bank shows no change till 2009-10 but it increases by 7.40% in 2010-11.

There is a huge fluctuation in the increase of reserves and surplus. It increases by 28% in 2007-
08,16%in 2008-09,18% in 2009-10 and 39% in 2010-11.

The investments has increased with a low rate . 2007-08- 25%,2008-09 – 19%, 2009-10 – 16.6%,
2010-11-16.47%

There is a fluctuating in increase in advances 27% in 2007-08,34.9% in 2008-09, 21.5%in 2009-

10, 30.64% in 2010-11.

There is decline of fixed assets in 2008-09 and 2009-10 with 5% and 1% respectively. The
reason may be the increase in the rate of depreciation in the subsequent years.

There has been an increase in borrowings. 243% in 2007-08, 43.5% in 2008-09, 136% in 2009-
10,67% in 2010-11.

PROFIT AND LOSS OF BANK OF BARODA FOR THE YEAR ENDING ON MARCH
2007-11

absolute absolute absolute

  change % absolute change % change % change %
  2007-08   2008-09   2009-10   2010-11  
particulars                
income:                
26.61
total income 3,270.1 30.87% 3,984.7 28.74% 1,655.5 9.27% 5,190.4 %
expenditure:                
21.61
interest expended 2,475.11 45.61% 2,066.50 26.15% 791 7.93% 2,324.8 %
20.35
operating expenses 598.82 21.61% 474.39 14.08% 866.57 22.54% 958.65 %
other provisions and - 74.12
contingencies -212.90 -15.54% 652.15 56.36% -832.92 46.04% 723.60 %
24.36
total expenses 2,861.0 29.90% 3,193.0 25.69% 824.3 5.28% 4,007.1 %
38.69
net profit of the year 409.06 39.85% 791.68 55.15% 831.13 37.32% 1,183.35 %
extra ordinary items 0 0.00% 0 0.00% 0 0.00% 0 0.00%
profit brought forward 0 0.00% 0 0.00% 0 0.00% 0 0.00%
38.69
total 409.06 39.85% 791.68 55.15% 831.13 37.32% 1,183.35 %

53
INTERPRETATION:

The net profit of the year shows a fluctuating trend i.e., 39.85% in 2007-08,55.15% in2008-
09,37.32% in 2009-10and 38.69% in 2010-11.

The interest expended shows a fluctuating trend in 2007-08 to 2010-11

2007-08-45.61%,2008-2009-26.51% ,

BETA VALUATION :

state bank of
  India bank of Baroda
     
beta 0.8 0.9

beta

0.9
0.88
0.86
0.84 beta

0.82
0.8
0.78
0.76
0.74
state bank of india bank of baroda

The graph shows the compare beta of SBI and BOB which is 0.8 and 0.9 which means that
both are comparatively good. There betas are<1 which means it is goodfor the investors to
invest in the bank as it is less risky in nature.

SUSTAINABLE EARNINGS:

SBI BOB
SUSTAINABLE 8857 3136

54
EARNINGS

SUSTAINABLE EARNINGS
10000
8857
9000
8000
7000
6000
SUSTAINABLE EARNINGS
5000
4000
3136
3000
2000
1000
0
SBI BOB

CRAR% ANALYSIS :

SBI BOB
BASEL-II
CRAR% 11.98 14.52

55
 BASEL-II CRAR%
16
14.52
14
11.98
12

10
BASEL-II CRAR%
8

0
SBI BOB

56