A PROJECT REPORT ON FINANCIAL PERFORMANCE ANALYSIS OF AXIS BANK

In partial fulfillment of the requirement for the award of the Degree of POST GRADUATE DIPLOMA IN MANAGEMENT OF SIVA SIVANI INSTITUTE OF MANAGEMENT Submitted by SNEHA.N.S (REG NO B4-47)
Under the guidance of Prof. B.S.RAO (FACULTY SSIM)

BANKING INSURANCE FINANCE AND ALLIED SERVICE

Siva Sivani Institute of Management NH-7, Kompally, Secunderabad-500014

DECLARATION
I, SNEHA.N.S hereby declare that this project report entitled FINANCIAL PERFORMANCE ANALYSIS OF AXIS BANK has been prepared by me in partial fulfillment of the requirements of POST GRADUATE DIPLOMA IN MANAGEMENT Degree 2010 2012 of SIVA SIVANI INSTITUTE OF MANAGEMENT. I also declare that this project has not been submitted by me fully or partially for the award of any Degree, Diploma and Title of Recognition earlier.

PLACE: HYDERABAD DATE: 15.06.2011

SNEHA.N.S (REG NO: B4-47)

LIST OF CONTENTS
CHAPTER CONTENTS ACKNOWLEDGEMENTS LIST OF TABLES LIST OF CHARTS INTRODUCTION INDUSTRY PROFILE COMPANY PROFILE TITLE OF THE STUDY SCOPE OF THE STUDY OBJECTIVE OF THE STUDY LIMITATIONS OF THE STUDY RESEARCH PROBLEM DATA COLLECTION TOOLS USED FOR ANALYSIS

REVIEW OF LITERATURE MEANING AND CONCEPT OF FINANCIAL ANALYSIS TYPES OF FINANCIAL ANALYSIS PROCEDURE OF FINANCIAL STATEMENT ANALYSIS TOOLS OF FINANCIAL ANALYSIS ANALYSIS & INTERPRETATION RATIO ANALYSIS COMPARATIVE BALANCE SHEET COMPARATIVE INCOME STATEMENT CONTENTS COMMON SIZE BALANCE SHEET TREND ANALYSIS FINDINGS &

CHAPTER

RECOMMENDATIONS FINDINGS RECOMMENDATIONS CONCLUSION 5 ANNEXURE & BIBLIOGRAPHY ANNEXURE BIBLIOGRAPHY

ACKNOWLEDGEMENT
I express my sincere gratitude to Mr. Noble .M. Paul, Vice President and Branch head, Axis Bank, Mrs. Leena Vikraman senior manager Axis Bank, Mr. Dileep, Assistant vice president, Axis Bank for giving me all the support for undergoing the project. I equally thank RASHMI mam, Head of Personnel Department, Axis Bank, Chennai for allowing me to do this project work in their esteemed organization. I express my heartfelt gratitude to Prof. B.S.RAO, my faculty guide for his valuable help, special guidance and inspiration to complete the project work. I express my sincere gratitude to Mr. RAHUL JAIN, PLACEMENT TRAINING DIRECTOR OF Siva sivani institute of management, Secunderabad for giving me an opportunity to undertake this project work. I would also like to extend my gratefulness to the faculty members and other staff members of the college for their great support. I express my sincere thanks to my parents, brother, friends and well wishers who cooperated with me and encouraged me to finish this project successfully. Above all I thank God Almighty for guiding my steps. SNEHA.N.S

LIST OF TABLES

SL No. 1 2 3 4 5 6 7 8 9 10 11 12

CONTENTS Current Ratio Quick Ratio Debt Equity Ratio Proprietary Ratio Return on Equity Capital Ratio Capital Adequacy Ratio Price Earnings Ratio Earning per Share Dividend Payout Ratio Comparative Balance Sheet as on March 2010 and 2009 Comparative Balance Sheet as on March 2009 and 2008 Comparative Balance Sheet as on March 2008 and 2007

13 14 15 16 17 18 19 SL No. 20 21 22 23

Comparative Balance Sheet as on March 2007 and 2006 Comparative Balance Sheet as on March 2006 and 2005 Comparative Profit and Loss account as on March 2010 and 2009 Comparative Profit and Loss account as on March 2009 and 2008 Comparative Profit and Loss account as on March 2008 and 2007 Comparative Profit and Loss account as on March 2007 and 2006 Comparative Profit and Loss account as on March 2006 and 2005 CONTENTS Common Size Balance Sheet as on March 2010 and 2009 Common Size Balance Sheet as on March 2009 and 2008 Common Size Balance Sheet as on March 2008 and 2007 Common Size Balance Sheet as on March 2007 and 2006

24 25

Common Size Balance Sheet as on March 2006 and 2005 Trend Analysis

LIST OF CHARTS
SL No. 1 2 3 4 CONTENTS Current Ratio Quick Ratio Debt Equity Ratio Proprietary Ratio

5 6 7 8 9

Return on Equity Capital Ratio Capital Adequacy Ratio Price Earning Ratio Earning per Share Dividend Payout Ratio

CHAPTER 1 INTRODUCTION

Industry Profile
The banking industry is a highly regulated industry with detailed and focused regulators. Bank activities can be divided into retail banking, dealing directly with individuals and small businesses; business banking, providing services to mid-market business; corporate banking, directed at large business entities; private banking, providing wealth management services to High Net worth Individuals and families; and investment banking, relating to activities on the financial markets. Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profits. Central banks are normally government owned banks, often charged with quasi-regulatory responsibilities, e.g. supervising commercial banks, or controlling the cash interest rate. They generally provide liquidity to the banking system and act as Lender of last resort in event of a crisis. Banks have influenced economies and politics for centuries.

Historically, the primary purpose of a bank was to provide loans to trading companies. Banks provided funds to allow businesses to purchase inventory, and collected those funds back with interest when the goods were sold. For centuries, the banking industry only dealt with businesses, not consumers. Commercial lending today is a very intense activity, with banks carefully analyzing the financial condition of their business clients to determine the level of risk in each loan transaction. Banking services have expanded to include services directed at individuals, and risks in these much smaller transactions are pooled. The business of banking is in many English common law countries not defined by statute but by common law. Banks borrow money by accepting funds deposited on current accounts, by accepting Term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend Money by making advances to customers on current accounts, by making installment loans, and by investing in marketable debt securities and other forms of money lending.

Banks provide almost all payment services, and a bank account is considered indispensable by most businesses, individuals and governments. Non-banks that provide payment services such as remittance companies are not normally considered an adequate substitute for having a bank account. Banks borrow most funds from households and non-financial businesses, and lend most funds to households and non-financial businesses, but non-bank lenders provide a significant and in many cases adequate substitute for bank loans, and money market funds, cash management trusts and other non-bank financial institutions in many cases provide an adequate substitute to banks for lending savings too. PhaseI The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was

established which started as private shareholders banks, mostly Europeans shareholders. In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. During those days public has lesser confidence in the banks. As an aftermath deposit

mobilization was slow. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Moreover, funds were largely given to traders. PhaseII Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalised Imperial Bank of India with extensive banking facilities on a large scale specially in rural and semi-urban areas. It formed State Bank of india to act as the principal agent of RBI and to handle banking transactions of the Union and State Governments all over the country. Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th July, 1969, major process of nationalization was carried out. It was the effort of the then Prime Minister of India, Mrs. India Gandhi. 14 major commercial banks in the country was nationalized. Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with seven more banks. This step brought 80% of the banking segment in India under

Government ownership. The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country:

1949: Enactment of Banking Regulation Act. 1955: Nationalization of State Bank of India. 1959: Nationalization of SBI subsidiaries. 1961: Insurance cover extended to deposits. 1969: Nationalization of 14 major banks. 1971: Creation of credit guarantee corporation. 1975: Creation of regional rural banks. 1980: Nationalization of seven banks with deposits over 200 crore.

After the nationalization of banks, the branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge jump by 11,000%. Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions. Phase III This phase has introduced many more products and facilities in the banking sector in its

reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set up by his name which worked for the liberalization of banking practices. The country is flooded with foreign banks and their ATM stations. Efforts are being put To give a satisfactory service to customers. Phone banking and net banking is introduced. The entire system became more convenient and swift. Time is given more importance than money. The financial system of India has shown a great deal of resilience. It is sheltered from any Crisis triggered by any external macroeconomics shock as other East Asian Countries Suffered. This is all due to a flexible exchange rate regime; the foreign reserves are high, The capital account is not yet fully convertible, and banks and their customers have Limited foreign exchange exposure. Currently, banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. The overall performance of the Indian Economy

has shown an upward trend and a steady growth during the last year. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. One may also expect Mergers and Acquisitions, takeovers, and asset sales.

Wider Commercial Role of Banks The commercial role of banks is wider than banking, and includes: Issue of banknotes (promissory notes issued by a banker and payable to bearer on demand).

 Processing of payments by way of telegraphic transfer, EFTPOS, internet banking or other means. Issuing bank drafts and bank cheques. Accepting money on term deposit. Lending money by way of overdraft, installment loan or otherwise. Providing documentary and standby letters of credit, guarantees, performance bonds, securities underwriting commitments and other forms of off balance sheet exposures. Safekeeping of documents and other items in safe deposit boxes. Currency exchange. Sale, distribution or brokerage, with or without advice, of insurance, unit trusts and similar financial products as a 'financial supermarket'.

Banking law is based on a contractual analysis of the relationship between the bank and the customer. The definition of bank is given above, and the definition of customer is any

person for whom the bank agrees to conduct an account. The law implies rights and obligations into this relationship as follows: The bank account balance is the financial position between the bank and the customer, when the account is in credit, the bank owes the balance to the customer, when the account is overdrawn, the customer owes the balance to the bank. The bank engages to pay the customer's cheques up to the amount standing to the credit of the customer's account, plus any agreed overdraft limit. The bank may not pay from the customer's account without a mandate from the customer, e.g. a cheque drawn by the customer. The bank engages to promptly collect the cheques deposited to the customer's account as the customer's agent, and to credit the proceeds to the customer's account. The bank has a right to combine the customer's accounts. The bank has a lien on cheques deposited to the customer's account, to the extent that the customer is indebted to the bank.

 The bank must not disclose the details of the transactions going through the customer's account unless the customer consents, there is a public duty to disclose, the bank's interests require it, or under compulsion of law. The bank must not close a customer's account without reasonable notice to the customer, because cheques are outstanding in the ordinary course of business for several days. These implied contractual terms may be modified by express agreement between the customer and the bank. The statutes and regulations in force in the jurisdiction may also modify the above terms and/or create new rights, obligations or limitations relevant to the bank-customer relationship.

Economic functions The economic functions of banks include: Issue of money, in the form of banknotes and current accounts subject to cheque or payment at the customer's order. These claims on banks can act as money because they are negotiable and/or repayable on demand, and hence valued at par and effectively

transferrable by mere delivery in the case of banknotes, or by drawing a cheque, delivering it to the payee to bank or cash. Netting and settlement of payments -- banks act both as collection agent and paying agents for customers, and participate in inter-bank clearing and settlement systems to collect, present, be presented with, and pay payment instruments. This enables banks to economize on reserves held for settlement of payments, since inward and outward payments offset each other. It also enables payment flows between geographical areas to offset, reducing the cost of settling payments between geographical areas. Credit intermediation -- banks borrow and lend back-to-back on their own account as middle men. Credit quality improvement -- banks lend money to ordinary commercial and personal borrowers (ordinary credit quality), but are high quality borrowers. The improvement comes from diversification of the bank's assets and the bank's own capital which provides a buffer to absorb losses without defaulting on its own obligations. Maturity transformation -- banks borrow more on demand debt and short term debt, but provide more long term loans. Bank can do this because they can aggregate issues (e.g.

accepting deposits and issuing banknotes) and redemptions (e.g. withdrawals and redemptions of banknotes), maintain reserves of cash, invest in marketable securities that can be readily sold if needed, and raise replacement funding as needed from various sources (e.g. wholesale cash markets and securities markets) because they have a high and more well known credit quality than most other borrowers. Banking Scenario In its July Update of the World Economic Outlook (WEO), the IMF raised its global growth projection for 2010 to 4.6 % from its April projection of 4.2 % on the strength of Q1 growth rates. There is widespread expectation of a slowdown of the global economy in the second half of 2010. Domestic Economy The Indian economy grew by 7.4 % in 2009-10. The double digit growth in the Index of Industrial Production (IIP) continued during the current financial year. The lead indicators of service sector also suggest increased economic activity.

Inflation: WPI inflation has been in double digits since February 2010. Headline inflation, as measured by year-on-year variation in WPI, rose to 10.6 % in June 2010, up from 10.2 % in May 2010. Notably, WPI inflation based on revised data for March at 11.0 % and for April at 11.2 %, were higher by over one percentage point as compared with the provisional numbers.. Money Supply : M3 growth on a year-on-year basis moderated from 16.8 % at endMarch 2010 to 15.3 % as on July 2, 2010 reflecting a slowdown in the growth in bank deposits. In order to finance higher credit growth in the face of declining deposit growth, banks unwound their investments in mutual funds and accessed the repo window of the Reserve Bank. Deposits & lending Rates : On the deposit side, banks increased their term deposit rates by 75-100 basis points between March 2010 and July 16, 2010. On the lending side, benchmark prime lending rates (BPLRs) of banks remained unchanged from July 2009 till end- June 2010. The banking system switched over to the Base Rate system with effect from July 1, 2010. The Base Rates set by major banks are in the range of 7.25-8.0 %.

Company Profile:
Axis Bank was the first of the new private banks to have begun operations in 1994, after the Government of India allowed new private banks to be established. The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI - I), Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC) and other four PSU insurance companies, i.e. National Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd. The Bank as on 31st March, 2011 is capitalized to the extent of Rs. 410.54 crores with the public holding (other than promoters and GDRs) at 53.60%. The Bank's Registered Office is at Ahmedabad and its Central Office is located at Mumbai. The Bank has a very wide network of more than 1281 branches (including 169

Service Branches/CPCs as on 31st March, 2011). The Bank has a network of over 6270 ATMs (as on 31st March, 2011) providing 24 hrs a day banking convenience to its customers. This is one of the largest ATM networks in the country. The Bank has strengths in both retail and corporate banking and is committed to adopting the best industry practices internationally in order to achieve excellence.
Board of Directors
The members of the Board are : Dr. Adarsh Kishore Smt. Shikha Sharma Shri S. K. Chakrabarti Shri J.R. Varma Dr. R.H. Patil Smt. Rama Bijapurkar Shri R.B.L. Vaish Shri M.V. Subbiah Shri K. N. Prithviraj Shri V. R. Kaundinya Shri S. B. Mathur Shri S. K. Roongta Shri Prasad R. Menon Shri R. N. Bhattacharyya

Chairman Managing Director & CEO Deputy Managing Director Director Director Director Director Director Director Director Director Director Director Director

Promoters Axis Bank Ltd. has been promoted by the largest and the best Financial Institution of the country, UTI. The Bank was set up with a capital of Rs. 115 crore, with UTI contributing Rs. 100 crore, LIC - Rs. 7.5 crore and GIC and its four subsidiaries contributing Rs. 1.5 crore each. SUUTI - Shareholding 23.68% Erstwhile Unit Trust of India was set up as a body corporate under the UTI Act, 1963, with a view to encourage savings and investment. In December 2002, the UTI Act, 1963 was repealed with the passage of Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 by the Parliament, paving the way for the bifurcation of UTI into 2 entities, UTI-I and UTI-II with effect from 1st February 2003. In accordance with the Act, the Undertaking specified as UTI I has been transferred and vested in the Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI), who manages assured return schemes along with 6.75% US-64 Bonds, 6.60% ARS Bonds with a Unit Capital of over Rs. 14167.59 crores.

The Government of India has appointed Shri K. N. Prithviraj as the Administrator of the Specified undertaking of UTI, to look after and administer the schemes under UTI - I, where Government has continuing obligations and commitments to the investors, which it will uphold.

Vision 2015 and Core Values

VISION 2015:

To be the preferred financial solutions provider excelling in customer delivery through insight, empowered employees and smart use of technology Core Values

Customer Centricity Ethics Transparency Teamwork Ownership

Credit Ratings
Fitch India wef 20th October, 2010 Subordinated Debt Perpetual Tier I Unsecured Subordinated Upper Tier II Subordinated Lower Tier II Support Rating Individual Rating ICRA Ltd. Certificate of Deposits Subordinated Debit Upper Tier II Bonds Hybrid Tier I CRISIL Certificate of Deposits P1+ A1+ LAAA LAA+ LAA+ AAA(Ind) Stable Outlook AA+(Ind) Stable Outlook AA+(Ind) Stable Outlook AAA(Ind) Stable Outlook 3 C

CARE Ratings wef 11th November 2008 Subordinated Tier II Bonds AAA

Axis Bank offers a number of products and services across different categories. The various categories are:

1.

Personal Banking NRI Banking Corporate Banking Agri and Rural Priority

2. 3. 4. 5.

Personal Banking:
Accounts Deposits Loans Cards Forex Investments Insurance Payments Other Services

Corporate Banking:
Accounts Credit Capital market Treasury Cash management services Govt.business

Business Banking:
Accounts Deposits Remittances Services

Agri and Rural

Agri Business Microfinance Financial inclusion Rural banking

Priority
Accounts Deposits Loans Card

Investments Insurance Payments Remittances Other Services

TITLE
FINANCIAL PERFORMANCE ANALYSIS OF AXIS BANK .

SCOPE OF STUDY
Financial performance is a very important factor for the long-term survival and profitability of any organization. The purpose of financial analysis is to diagnose the information contained in financial statements so as to grudge the profitability and financial soundness of the firm. For the purpose the study has been conducted for a period of five years.

OBJECTIVE
Major objective The main objective of the study is to make an analysis of the financial performance of Axis Bank Ltd.

Minor objectives
To assess the liquidity position of the bank To assess the profitability position of Axis for the period of 5 years To analyze the current assets & current liabilities of the bank To study the adequacy of the banks earnings To measure the overall performance of Axis Bank.

LIMITATIONS OF THE STUDY

The study is based on historical data. So the informations cant be completely reliable. The study will be only a professional one based on the data collected from annual report and accounts during the subject to refinement.

To do the performance analysis only the last five years figures are taken in to account.

RESEARCH PROBLEM
Axis Bank is one of the banks that witnessed tremendous growth during the past many years. But the bank has not been able to put up a consistent performance year after year.

The purpose of Financial Analysis is to diagnose the information contained in financial statements so as to judge the profitability and financial soundness of the firm. Financial statements are prepared primarily for decision-making.

DATA COLLECTION
The study is an empirical one. It uses both primary and secondary.

Primary Data
Primary data were collected through depth interview with concerned officers of the bank.

Secondary Data
Secondary data were collected from the financial statements of Axis Bank for five years. (Profit & Loss account, Balance sheet etc).

TOOLS USED FOR ANALYSIS

Tools used for analysis of financial performance of Axis Bank are Ratio Analysis, Comparative Statement, Common Size Statement, and Trend Analysis.

CHAPTER 2

REVIEW OF LITERATURE

REVIEW OF LITERATURE MEANING AND CONCEPT OF FINANCIAL ANALYSIS

The team financial Analysis also known as analysis 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, profit and loss account and other operative data. The purpose of financial Analysis is to diagnose the information contained in financial statement so as to gauge the profitability and financial soundness of the firm. The analysis and interpretation of financial statements is essential to bring out the mystery behind the figures in financial statements. The term Financial Statement Analysis includes both analysis and interpretation. While the term Analysis is to mean the simplification of financial data by methodical

classification of the data given in the financial statement, interpretation means explaining the meaning and significant of the data so simplified.

TYPES OF FINANCIAL ANALYSIS

Financial analysis can be classified in to different categories depending upon:

1. On the basis of material used

According to the data used, financial analysis can be of two types:-

a) External analysis This analysis is done by outsiders who do not have access to the detailed internal accounting records of the business of the firm. This outsider includes investors, potential investors, creditors, potential creditors, government agencies, credit

agencies and general public. For financial analysis these external parties to the firm depend almost entirely on the published financial statements.

b)Internal analysis
The analysis conducted by persons who have access to the internal accounting records of the business firm is known as internal analysis. Such an analysis can, therefore be performed by executives and employees of the organizations as well as the government agencies which have statutory powers vested in them.

2 On the basis of modus operandi

According to the method of the operation followed in the analysis, financial analysis can also be of two types:

a) Horizontal analysis

Horizontal analysis refers to the comparison of financial data of a company for several years. The figures for this type of analysis are presented horizontally over a number of columns .The figures of various years are compared with the standard or base year .A base year is a year chosen as beginning point. The horizontal analysis makes it possible to focus attention on items that have changed significantly during the period under review. Comparative statements and trend percentages are two tools employed in horizontal analysis.

b)Vertical analysis
Vertical analysis refers to the study of relationship of the various items in the financial statement of one accounting period .In this type of analysis the figures from financial statement of a year are compared with a base selected from the same years statement. Common-size financial statements and financial ratios are the two tools employed in vertical analysis.

PROCEDURE OF FINANCIAL STATEMENT ANALYSIS

There are three steps involved in the analysis of financial statements. These are 1. Selection. 2. Classification. 3. Interpretation.

1. Selection This step involves selection of information relevant to the purpose of analysis of financial statement.

2. Classification It involves the methodical classification of data.

3. Interpretation It includes drawing of interferences and conclusions.

Procedure
1. The analyst should acquaint himself with the principles and postulates of accounting. 2. The extent of analysis should be determined so that the sphere of work may be decided. 3. Financial data given in the statement should be reorganized and rearranged. 4. A relationship established among financial statement with the help of tools techniques of analysis such as ratios, Trends, common size, etc. 5. The information is interpreted in a simple and understandable manner.
6.

The conclusion should be drawn from interpretation.

TOOLS OF FINANCIAL ANALYSIS

1. Ratio Analysis. 2. Comparative Financial Statements. 3. Common size Financial Statements. 4. Trend Analysis.

Ratio Analysis:
Ratio analysis is the most powerful tool of the financial analysis. Ratio analysis is a process of identifying the financial strengths and weakness of the firm. Financial ratio analysis groups the ratios into categories which tell about different facets of a company's finances and operations. An overview of some of the categories of ratios is given below.

Leverage Ratios which show the extent that debt is used in a company's capital structure.

Liquidity Ratios which give a picture of a company's short term financial situation or solvency.

Operational Ratios which use turnover measures to show how efficient a company is in its operations and use of assets.

Profitability Ratios which use margin analysis and show the return on sales and capital employed.

Solvency Ratios which give a picture of a company's ability to generate cash flow and pay its financial obligations.

The ratio analysis tools are very useful for individuals to instantly assess a company or industry by making two basic types of comparisons. First, the analyst can compare a

present ratio with past (or expected) ratios for the organization to determine if there has been an improvement or deterioration or no change over time. Second, the ratios of one organization may be compared with similar organizations or with industry averages at the same point in time. This is a type of "benchmarking" so that one may determine whether the organization is "average" in performance or doing better or worse than others. For the professional, conducting such in-depth analyses is critical, allowing an analyst to make an informed business or investment decision.

Comparative Financial Statements:

The changes in the financial data over a period can be best understood if the statements of two or more years are placed side by side to facilitate comparison. Such statements are called Comparative financial statements.

Comparative financial statements can be: Comparative Balance Sheet It shows the assets, liabilities and owners equity of an enterprise at the beginning and at the end of the accounting period with increases and decreases in terms of rupees and percentages. The single Balance sheet focuses on the financial status of the firms on a particular date, while the Comparative Balance sheet focuses on the changes that have taken place in one accounting period. Comparative Income Statement It will show the operating results for two or three periods and the amount as well as percentage increase or decrease in them. It gives an idea of the progress of a business over a period of time.

Common Size Financial Statements: In Common size Financial Statements, the items are converted into percentages taking some common base. These statements are also called 100 percent statements or Component Percentage because each statement is reduced to the total 100 and each individual item is expressed as a percentage of this total. Common size Financial Statements can be: Common Size Balance Sheet A statement in which each asset is shown as a percentage of total assets and each liability and capital shown as a percentage of total liability and capital is called a Common size balance sheet.

Trend Analysis:
Comparing the past data over a period of time with a base year is called Trend Analysis. Under this technique, information for a number of years is taken up and one year (usually the first year) is taken as the base year. Each item of the base year is taken as 100 and on that basis the percentages for other years are calculated.

CHAPTER 3

ANALYSIS AND INTERPRETATION

CURRENT RATIO
Current Ratio = Current Assets Current Liabilities

Year

2006

2007

2008

2009

2010

Current Ratio

0.4

0.32

0.36

0.37

0.63

0.7 0.6 0.5 0.4

0.3
0.2 0.1 0 2006 2007 2008 2009 2010

Interpretation Current Ratio is a measure of a firms short term solvency. It is also called working capital ratio. The ideal current ratio is 2:1. The ratios are below 0 in all the years. Since the current ratio for all the 5 years is within the range of 0, it indicates that the bank is having sufficient liquidity and is in a good position.

QUICK RATIO
Quick Ratio = Quick Assets Quick Liabilities

year Quick Ratio

2006 6.52

2007 7.39

2008 9.23

2009 9.52

2010 19.19

Interpretation Quick or Liquid Ratio gives a better picture of the firms liquidity. A quick ratio of 1:1 is considered ideal. The Quick ratio is high in 2010, ie 19.19 and is low in 2006, ie 6.52. even if the ratios fall below, it will not seriously affect the liquidity of the bank.

DEBT EQUITY RATIO

Debt Equity Ratio = Outsiders funds Shareholders funds

Year

2006

2007

2008

2009 13.46

2010 10.26

Debt Equity 16.23 20.53 11.49 Ratio

25 20 15 10 5 0 2006 2007 2008 2009 2010

Interpretation Debt Equity ratio reflects the relative claims of shareholders and creditors against the assets of the company. The debt equity ratio is better in 2010 compared to the previous years.

PROPRIETARY RATIO

Proprietary Ratio = Shareholders fund x 100 Total Assets

Year Proprietary Ratio

2006 2007

2008

2009 0.069

2010 0.089

0.058 0.046 0.080

0.08 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0 2006 2007 2008 2009 2010

Interpretation Proprietary ratio indicates the proportion of total assets financed by shareholders. The proprietary ratio of the bank shows an increasing trend in the study periods. The ratio was the lowest in 2007 and it reached the maximum of .089 in 2010.

RETURN ON EQUITY RATIO

Return on Equity Ratio = Net Profit after tax and pref dividend x 100 Total Assets

Year Return on Equity

2006 1.37

2007 1.85

2008 1.92

2009 2.28

2010 2.69

Interpretation The Return on Equity Ratio shows the return to equity shareholders in relation to the amount of capital invested by them. The ratio was the highest in 2010 with 2.69 %. ROE is increasing year on year.

CAPITAL ADEQUACY RATIO

Capital Adequacy Ratio = Capital Risk

Year CAR

2006

2007

2008

2009

2010 15.80

11.08 11.57 13.73 13.69

Interpretation

Capital adequacy ratios are a measure of the amount of a bank's capital expressed as a percentage of its risk weighted credit exposures. Bank is maintaining required CAR throughout the year

PRICE EARNING RATIO

Price Earning Ratio = Market price per Share Earning per Share

Year

2006

2007

2008

2009

2010

Price Earnings Ratio

5.91

5.16

8.19

5.63

6.38

9 8 7 6 5 4 3 2 1 0 2006 2007 2008 2009 2010

Interpretation

The Price Earning Ratio gives a fair idea of the potential market price of a share. It indicates the number of times the earning per share is covered by its market price. In 2010, the ratio is very high i.e. 6.38. In 2007, the ratio is 5.16.

EARNING PER SHARE

Earning per Share = Net Profit available to ESH No of Equity Shares

Year Earnings per Share

2006

2007

2008

2009

2010

17.41 23.40 29.94 50.57 62.06

70 60 50 40 30 20 10 0 2006 2007 2008 2009 2010

Interpretation

Earning per Share indicates the profits available to Equity share holders per share basis. It is an important market test ratio. As the EPS is increasing year on year, Axis bank is a good place to invest.

DIVIDEND PAYOUT RATIO

Dividend Payout Ratio = Dividend paid to ESH NP belonging to ESH

Year Dividend Payout Ratio

2006 2007 2008 2009

2010

23.20 22.57 23.49 23.16 22.56

Interpretation

Dividend Payout Ratio indicates what percentage share of the net profit after taxes and preference dividend is paid out as dividend to the Equity share holders. The dividend payout ratio of Axis bank provides an idea of how well earnings support the dividend payments.

Table Showing Comparative Balance Sheet As on March 2006 and 2005

(Rs. In 000s)

Particulars

31-3-2006

Absolute % Changes 31-3-2005 Changes in in 2005-2006 2005-2006

Capital and Liabilities: Capital Reserves and Surplus ESOP Deposits Borrowings Other Liabilities and Provisions Total 2786907 2737964 48943 1.79 21.51 0.16 26.49 50.49 121.53

25934957 21343882 4591075 134394 134173 221 401135313 317120001 84015312 26809318 40510278 17814115 18286773 8995203 22223505

497311167 377436908 119874259

31.76

Assets: Cash and Balances with RBI 24293964 34487411 -10193447 -29.56

Balances with banks and money at call and 12124458 short notice Investments Advances Fixed Assets Other Assets Total

10541953

1582505

15.01

215273513 150480194 223142304 156029219 5677131 16799797 5184358 20713773

64793319 67113085 492773 - 3913976

43.05 43.01 9.50 - 18.90 31.76

497311167 377436908 119874259

Interpretation We can see that there is an increase in the other liabilities and provisions of the bank in 2006 compared to 2005, ie an increase of 121.53%. The investments and fixed assets showed a positive change in 2006. The overall financial position of the company is satisfactory.

Table Showing Comparative Balance Sheet As on March 2007 and 2006

Rs (000) Absolute % Changes 31-3-2006 Changes in in 2006-2007 2006-2007

Particulars

31-3-2007

Capital and Liabilities: Capital Reserves and Surplus ESOP Deposits Borrowings Other Liabilities and Provisions Total 2816308 2786907 29401 1.05 19.98 -33.19 46.55 93.80 45

31115981 25934957 5181024 89783 134394 -44611 587856011 401135313 186720698 51956030 58738042 26809318 40510278 25146712 18227764

732572155 497311167 235260988

47.30

Assets: Cash and Balances with RBI 46610303 24293964 22316339 91.86

Balances with banks and money at call and 22572748 short notice Investments Advances Fixed Assets Other Assets Total

12124458

10448290

86.18

268971603 215273513

53698090

24.94 65.26 18.58 102.51 47.30

368764832 223142304 145622528 6731941 18920728 5677131 16799797 1054810 17220931

732572155 497311167 235260988

Interpretation The comparative balance sheet of the company reveals that during 2007 there has been an increase in fixed assets of. 18.58%. other liabilities to outsiders have relatively increased by Rs 18227764 and equity share capital has increased by Rs 29401. This fact indicates that the policy of the bank is to purchase fixed assets from the longterm sources of finance. There is an increase in other assets with 102.51 % increase compared to 2006. There is a positive change in the Cash and Balances with RBI and Balances with banks and money at call and short notice as compared to the previous year. The financial position of bank is good.

Table Showing Comparative Balance Sheet As on March 2007 and 2008

(Rs. In 000s)

Particulars

31-3-2008

31-3-2007

Absolute Changes in 2007-2008

% Changes in 2007-2008

Capital and Liabilities: Capital Reserves and Surplus ESOP Deposits Borrowings Other Liabilities and Provisions Total 3577097 84107939 21868 876262206 56240405 75568972 2816308 31115981 89783 587856011 51956030 58738042 760789 52991958 -67915 288406195 4284375 16830930 27.01 170.31 -75.64 49.06 8.25 28.65

1095778487

732572155

363206332

49.58

Assets: Cash and Balances with RBI Balances with banks and money at call and short notice Investments Advances Fixed Assets Other Assets Total 73056569 46610303 26446266 56.74

51985835

22572748

29413087

130.30

337051008 596611446 9228501 27845128 1095778487

268971603 368764832 6731941 18920728 732572155

68079405 227846614 2496560 8924400 363206332

25.31 61.78 37.09 47.17 49.58

Interpretation There is an increase in Balances with banks and money at call and short notice and Reserve and surplus i.e.130.30% and 170.31% respectively increase compared to 2005. There is a positive change in the advances as compared to the previous year. The overall financial position of the company is satisfactory.

Table Showing Comparative Balance Sheet As on March 2008 and 2009

(Rs. In 000s) Absolute % Changes Changes in in 2008-2009 2008-2009

Particulars

31-3-2009

31-3-2008

Capital and Liabilities: 3590051 Capital 98545835 Reserves and Surplus ESOP Deposits Borrowings 101854762 Other Liabilities and Provisions Total 1477220487 1095778487 381442000 34.81 99476676 56240405 75568972 45614357 23907704 81.11 31.64 12111 1173741052 84107939 21868 876262206 14437896 -9757 297478846 17.17 -44.62 33.95 3577097 12954 0.36

Assets: Cash and with RBI Balances 94192103 73056569 21135534 28.93

Balances with banks and money at call and short notice Investments Advances Fixed Assets Other Assets Total

55976854

51985835

3991019

7.68

463303514 815567658 10728873 37451485

337051008 596611446 9228501 27845128

126252506 218956212 1500372 9606357

37.46 36.7 16.26 34.50 34.81

1477220487 1095778487 381442000

Interpretation We can see that there is a positive change in the total assets and total liabilities compared to the previous year, resulting into an improvement in the liquidity position of the bank.

Table Showing Comparative Balance Sheet As on March 2010 and 2009

(Rs. 000s) In

Particulars

31-3-2010

31-3-2009

Absolute % Changes Changes in in 2009-2010 2009-2010

Capital Liabilities: Capital

and

4051741

3590051

461690

12.86 58.70 -85.68 20.38 10.63 32.95

Reserves and Surplus ESOP Deposits Borrowings Other Liabilities and Provisions Total

156392749 98545835 57846914 1734 12111 -10377 1413002175 1173741052 239261123 171695512 61334608 155198710 46132728 16496802 15201880

1806478519 1477220487 329258032

22.29

Assets: Cash and Balances with RBI Balances with banks and money at call and short notice Investments Advances Fixed Assets Other Assets Total 94738756 94192103 546653 0.58

57325631

55976854

1348777

2.41

559748156 104341188 12224199 39010589

463303514 815567658 10728873 37451485

96444642 227863530 1495326 1559104

27.94 20.82 13.94 4.16 22.29

1806478519 1477220487 329258032

Interpretation We can see that there is an increase in the Capital, compared to 2005. There is a decrease in other assets as compared to the previous year. The financial position of bank is good.

Table Showing Comparative Income Statement As on March 2006 and 2005

(Rs. In 000s)

Particulars

Absolute 31-3-2006 31-3-2005 Changes in 20052006

% Changes in 2005-2006

Income: Interest Earned Other Income Total (A) Expenditure: Interest Expended Operating Expenses Provisions Contingencies Total (B) and 28887904 7296344 36184248 19241582 4158196 23399778 9646322 3138148 33784470 50.13 75.47 144.38

18105560 8140507 5087344 31333411 4850837

11929808 5813789 2310404 20054001 3345777

6175752 2326718 2776940 11279410 1505060

51.77 40.02 120.19 56.25 44.98

Net Profit for the year (A-B) Profit brought forward from previous year

1974076

1821024

153052

8.40

Transfer investments

from

2928137

2928137

Total

9753050

5166801

4586249

88.76

Interpretation The provisions and contingencies increased to the extent of 120.19% in 2006. There is positive increase in other income i.e. 75.47%. The overall profitability of the concern is good.

Table Showing Comparative Income Statement As on March 2007 and 2006

(Rs. In 000s)

Particulars

31-3-2007 31-3-2006

Absolute Changes in 20062007

% Changes in 2006-2007

Income: Interest Earned Other Income Total (A) Expenditure: Interest Expended Operating Expenses Provisions Contingencies Total (B) Net Profit for the year (A-B) and 29933172 12145984 7035712 18105560 8140507 5087344 11827612 4005477 1948368 65.33 49.20 38.29 45604038 10101113 55705151 28887904 7296344 36184248 16716134 2804769 19520902 57.87 38.44 53.95

49114868 6590283

31333411 4850837

17781457 1739446

56.75 35.86

Profit brought forward from previous year Transfer from investment fluctuation Utilization for employee benefits

7310390

1974076

5336314

270.32

2928137

-2928137

-100

-318028

318028

Total 13582645 9753050 3829595 39.27

Interpretation The profit brought forward from previous year has been increased to an extent of 270.32%.The comparative income statement given above shows that there has been an Operating expenses have increased. The increase in gross profit is Sufficient to cover the operating expenses. There is also an increase in net profit after tax. The overall profitability of the bank is good.

Table Showing Comparative Income Statement As on March 2008 and 2007

(Rs. In 000s)

Particulars

31-3-2008 31-3-2007

Absolute Changes in 20072008

% Changes in 2007-2008

Income: Interest Earned Other Income Total (A) Expenditure: Interest Expended Operating Expenses Provisions Contingencies Total (B) 44199617 21549269 and 11548863 77297749 29933172 12145984 6048226 48127382 14266445 9403285 5500637 29170367 47.66 77.41 90.95 60.61 70053151 17954888 88008039 44616552 10101113 54717665 25436599 7853775 33290374 57.01 77.75 60.84

Net Profit for the year (A-B) 10710290 Profit brought forward 10290740 from previous year Accounting standards -

6590283 7310390

4120007 2980350

62.52 40.77

-318028

318028

100

Total

21001030

13582645

7418385

54.62

Interpretation The provisions and contingencies has increased to 90.95%. The operating expenses have been increased compared to the previous year. It is concluded from the above analysis that there is sufficient progress in the performance of the bank.

Table Showing Comparative Income Statement As on March 2009 and 2008

(Rs. In 000s)

Particulars

31-3-2009

31-3-2008

Absolute Changes in 20082009

% Changes in 2008-2009

Income: Interest Earned Other Income Total (A) Expenditure: Interest Expended Operating Expenses Provisions and 71492742 28582127 19095184 44199617 21549269 11548863 27293125 7032858 7546321 61.75 32.64 65.34 108354856 70053151 28968781 17954888 38301705 11013893 49315598 54.66 61.34 56.04

137323637 88008039

Contingencies Total (B) Net Profit for the year (A-B) Profit brought forward from previous year 119170053 77297749 Total 18153584 15538689 10290740 10290740 7443294 5247949 69.49 50.99 41872304 54.17

33692273

21001030

12691243

60.43

Interpretation There was an increase of 6.97% in the net profit compared to the previous year. The overall profitability of the bank is satisfactory.

Table Showing Comparative Income Statement As on March 2010 and 2009

(Rs. In 000s)

Particulars

31-3-2010

31-3-2009

Absolute Changes in 20092010

% Changes in 2009-2010

Income: Interest Earned Other Income Total (A) Expenditure: Interest Expended Operating Expenses Provisions Contingencies Total (B) Net Profit for the year (A-B) and 66335261 37097223 27260217 71492742 28582127 19095184 -5157481 8515096 8165033 -7.21 29.79 42.76 116380215 108354856 39457819 28968781 8025359 10489038 7.40 36.21 13.48

155838034 137323637 18514397

130692701 119170053 11522648 25145333 18153584 6991749

9.67 38.51

Profit brought forward from previous year

23480865

15538689

7942176

51.11

Total

48626198

33692273

14933925

44.32

Interpretation The net profit in 2010 has increased compared to 2009. The performance of the bank is progressing.

Table Showing Common Size Balance Sheet as on March 2006 and 2005
(Rs. In 000s)

31-3-2006 Particulars Amount % of Total

31-3-2005 Amount % of Total

Capital and Liabilities: Capital Reserves and Surplus ESOP Deposits Borrowings Other Liabilities and Provisions Total 2786907 25934957 134394 401135313 26809318 40510278 497311167 0.56 5.22 0.03 80.66 5.39 8.14 100 2737964 21343882 134173 317120001 17814115 18286773 377436908 0.73 5.65 0.04 84.02 4.72 4.84 100

Assets: Cash and Balances with RBI Balances with banks and money at call and short notice Investments Advances Fixed Assets Other Assets Total 24293964 4.88 34487411 9.14

12124458

2.44

10541953

2.79

215273513 223142304 5677131 16799797 497311167

43.29 44.87 1.14 3.38 100

150480194 156029219 5184358 20713773 377436908

39.87 41.34 1.37 5.49 100

Interpretation The contribution of borrowings to the capital and liabilities increased in 2006.The contributions of Cash and Balances with RBI and balances with banks and money at call and short notice to assets have decreased in 2006. The bank is showing a positive trend.

Table Showing Common Size Balance Sheet as on March 2007 and 2006
(Rs. In 000s)

31-3-2007 Particulars Amount % of Total

31-3-2006 Amount % of Total

Capital and Liabilities: Capital Reserves and Surplus ESOP Deposits Borrowings Other Liabilities and Provisions Total 2816308 31115981 89783 587856011 51956030 58738042 0.38 4.25 0.01 80.25 7.09 8.02 2786907 25934957 134394 401135313 26809318 40510278 0.56 5.22 0.03 80.66 5.39 8.14

732572155

100

497311167

100

Assets: Cash and Balances with RBI Balances with banks and money at call and short notice Investments Advances Fixed Assets Other Assets Total 732572155 100 497311167 100 46610303 6.36 24293964 4.88

22572748

3.08

12124458

2.44

268971603 368764832 6731941 18920728

36.72 50.34 0.92 2.58

215273513 223142304 5677131 16799797

43.29 44.87 1.14 3.38

Interpretation The contribution of investments to the Assets increased in 2007.The contributions of Advances to assets have increased in 2007.

Table Showing Common Size Balance Sheet as on March 2008 and 2007
(Rs. In 000s)

31-3-2008 Particulars Amount % of Total

31-3-2007 Amount % of Total

Capital and Liabilities: Capital Reserves and Surplus ESOP Deposits Borrowings Other Liabilities and Provisions Total 1095778487 100 732572155 100 3577097 34107939 21868 876262206 56240405 75568972 0.33 7.68 0.00 79.97 5.13 6.89 2816308 31115981 89783 587856011 51956030 58738042 0.38 4.25 0.01 80.25 7.09 8.02

Assets: Cash and Balances with RBI Balances with banks and money at call and short notice Investments Advances Fixed Assets Other Assets Total 73056569 6.67 46610303 6.36

51985835 337051008 596611446 9228501 27845128 1095778487

4.74 30.76 54.45 0.84 2.54 100

22572748 268971603 368764832 6731941 18920728 732572155

3.08 36.72 50.34 0.92 2.58 100

Interpretation The contributions of Cash and Balances with RBI and balances with banks and money at call and short notice to assets have increased in 2008. The capital position of the company is good.

Table Showing Common Size Balance Sheet as on March 2009 and 2008
(Rs. In 000s)

31-3-2009 Particulars Amount % of Total

31-3-2008 Amount % of Total

Capital and Liabilities: Capital Reserves and Surplus ESOP Deposits Borrowings Other Liabilities and Provisions Total 3590051 98545835 12111 1173741052 101854762 99476676 0.24 6.67 0.00 79.46 6.90 6.73 3577097 34107939 21868 876262206 56240405 75568972 0.33 7.68 0.00 79.97 5.13 6.89

1477220487

100

1095778487

100

Assets: Cash and Balances with RBI Balances with banks and money at call and short notice Investments Advances Fixed Assets Other Assets Total

94192103

6.38

73056569

6.67

55976854 463303514 815567658 10728873 37451485 1477220487

3.79 31.36 55.21 0.73 2.53 100

51985835 337051008 596611446 9228501 27845128 1095778487

4.74 30.76 54.45 0.84 2.54 100

Interpretation The contribution of borrowings to the capital and liabilities increased in 2009.The contributions of balances with banks and money at call and short notice to assets have decreased in 2009. The working capital position of the bank is improving.

Table Showing Common Size Balance Sheet as on March 2010 and 2009
(Rs. In 000s)

31-3-2010 Particulars Amount % of Total

31-3-2009 Amount % of Total

Capital and Liabilities: Capital Reserves and Surplus ESOP Deposits Borrowings Other Liabilities and Provisions Total 4051741 1556392749 1734 1413002175 171695512 61334608 0.22 8.66 0.00 78.22 9.50 3.40 3590051 98545835 12111 1173741052 101854762 99476676 0.24 6.67 0.00 79.46 6.90 6.73

1806478519

100

1477220487

100

Assets: Cash and Balances with RBI Balances with banks and money at call and short notice Investments Advances Fixed Assets Other Assets Total

94738756

5.24

94192103

6.38

57325631 559748156 1043431188 1224199 39010589 1806478519

3.17 30.99 57.76 0.68 2.16 100

55976854 463303514 815567658 10728873 37451485 1477220487

3.79 31.36 55.21 0.73 2.53 100

Interpretation The contribution of borrowings to the capital and liabilities increased in 2010.The contributions of cash and balances with RBI in assets in 2010. The bank is showing a positive trend.

Trend Analysis Balance Sheet (Rs. In 000s) 2006 Particulars Capital and Liabilities: Capital Amount % 2007 Amount % 2008 Amount % 2009 Amount % 2010 Amount %

2786907

100

2816308

101.05 119.98 66.80 146.55 193.80 144.995

3577097 84107939 21868 876262206 56240405 75568972

128..35 324.30

3590051 98545835

128.82

4051741

145.38

Reserves 25934957 100 31115981 and Surplus ESOP 134394 100 89783 Deposits 401135313 100 587856011 Borrowings Other Liabilities and Provisions 26809318 40510278 100 100 51956030 58738042

379.97 1556392749 6001.14 1.29 352.25 640.43 151.41

16.27 12111 9.01 1734 218.45 1173741052 292.60 1413002175 209.78 155198710 186.54 46132728 578.90 113.88 171695512 61334608

Total

497311167 100 732572155 147.31

1095778487 220.34

1477220487 297.04 1806478519 363.25

Assets: Cash and Balances with RBI 24293964 Balances with banks and money at call and short notice Investments 215273513 100 268971603 124.94 Advances 223142304 100 368764832 165.26 Fixed Assets Other Assets 5677131 16799797 100 100 6731941 18920728 118.58 112.62 596611446 9228501 27845128 267.37 162.56 165.75 815567658 10728873 37451485 365.49 1043431188 467.61 188.98 222.93 1224199 39010589 21.56 232.21 337051008 156.57 463303514 215.22 559748156 360.02

100 46610303

191.86

73056569

300.72

94192103

387.72 94738756

389.97

12124458

100 22572748

186.18

51985835

428.77

55976854

461.69

57325631

472.81

Total

497311167 100 732572155 121.31

1095778487 124.24

1477220487 141.93

180645785

178.96

CHAPTER 4

FINDINGS, RECOMMENDATIONS &

CONCLUSION

FINDINGS 1. The current ratios are below 1 in all years which is a positive signal in the banking industry. 2. The quick ratios is above 1 in all the years. 3. The bank has been able to show stability in its capital adequacy ratio during the study periods. 4. The bank is having a good price earning ratio all over the study period. As on 2010, its 6.38. 5. In the case of Earning per share, its showing a positive trend.

RECOMMENDATIONS. 1. Constant control should be made to reduce the operating expenses of the bank. 2. The debt equity percentage should be reduced. 3. Acquiring more assets should be checked because already the majority of funds invested in fixed assets are of outside debts. 4. The quick ratio should be taken care of for further improvement of financial position of the bank. 5. The bank should take necessary steps to increase the current ratio.

CONCLUSION Analysis of financial statement is an attempt to measure the banks liquidity, profitability, solvency and other indicators to assess its efficiency and performance. It is of immense importance for financial controllers and managers. In this analysis, the strength and weakness of Axis bank is revealed. This study helps to know the ability of the firm to meet its financial obligations. In this study, an attempt has been made to understand the working of the Axis Bank. In this project work, an attempt has been made to analyze the published annual statements of the Axis Bank with the help of Ratio Analysis, Comparative statements, Common size statements and Trend Analysis. The financial performance analysis of the Axis Bank helped to know more about Axis bank and its financial efficiency. In the wake of liberalization economy, the bank has to enhance its performance. As a part of this, the management should improve the overall financial performance of the Bank. Moreover, the bank needs to show more consistency in its performance.

CHAPTER 5

ANNEXURE AND BIBLIOGRAPHY

ANNEXURE / APPENDIX:
Balance Sheet for the last 5 years (2006 2010) 2006 Particulars Capital and Liabilities: Capital 2786907 2816308 3577097 84107939 21868 876262206 56240405 75568972 3590051 98545835 4051741 1556392749 Amount 2007 Amount 2008 Amount 2009 Amount 2010 Amount

Reserves 25934957 31115981 and Surplus ESOP 134394 89783 Deposits 401135313 587856011 Borrowings Other Liabilities and Provisions 26809318 40510278 51956030 58738042

12111 1734 1173741052 1413002175 155198710 46132728 171695512 61334608

Total

497311167 732572155 1095778487

108274251

136525790

Assets: Cash and Balances with RBI 24293964 Balances with banks and money at call and short notice Investments 215273513 268971603 337051008 Advances 223142304 368764832 Fixed Assets Other Assets 5677131 16799797 6731941 18920728 596611446 9228501 27845128 815567658 10728873 37451485 1043431188 1224199 39010589 463303514 559748156

46610303

73056569

94192103

94738756

12124458

22572748

51985835

55976854

57325631

497311167 732572155 1095778487 1477220487 1806478519 Total

Profit and Loss Account for the last 5 years (2006 2010)
Particulars Income: Interest Earned Other Income Total (A) Expenditure: Interest Expended Operating Expenses Provisions and Contingencies Total (B) Net Profit for the year (A-B) 2006 Amount 2007 Amount 2008 Amount 2009 Amount 2010 Amount

28887904 44616552 70053151 108354856 116380215 7296344 10101113 17954888 28968781 39457819

36184248 54717665 88008039 137323637 155838034 18105560 29933172 29933172 71492742 8140507 12145984 21549269 6048226 5087344 31333411 48127382 77297749 119170053 130692701 4850837 6590283 10710290 18153584 25145333 11548863 28582127 19095184 37097223 27260217 66335261

Profit brought forward from previous year Transfer from investments

1974076

7310390

10290740

15538689

23480865

2928137

Utilisation

-318028

Total

9753050

13582645 21001030

33692273

48626198

BIBLIOGRAPHY Books: 1. Jain S.P and Narang K.L, Advanced Accountancy 2. Shekhar K.C and Bagavathi.V, Banking Theory and Practice. 3. Annual Reports of SIB from 2007-2008 to 2010-2011. Websites: 1. www.Axisbank.com 2. www.wikipedia.org