final financial analysis of bank

8/6/2019 Final Financial Analysis of Bank

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Financial analysis of


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Vertical Analysis

Common Size Balance Sheet as of 31 March 2010


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1% 0%

30%

69%

Assets

Net Block

Capital Work In progress

Investments

Net current assets

Liabilities

Share Capital

Reserves and Surplus

Secured loans

Unsecured Loans


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Common size income statement

Particulars Amount In cr. Percent of net sales

Net Sales 1981.90 100.00

Personal Expenses 163.27 8.2

Selling Expenses 13.42 0.67

Administrative

Expenses

166.84 0.84

Provisions made 12.20 0.62

Total expenditure 355.72 17.9

Operating profit 445.34 22.4

EBITDA 1653.31 83.4

Depreciation 22.63 1.1

EBIT 1630.68 82.27

Interest 1193.05 60.19

EBT 425.43 0.21Taxes 89.84 24.7

Profit and loss for

the year

335.59 16.9

Nonrecurring items 0.44 0.02

PAT 336.03 16.9


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Horizontal Analysis

Comparative Balance Sheets as on 31 March 2006-2010

Mar

'06

Mar

'07

Mar

'08

Mar

'09

Mar

'10

Capital and Liabilities:

Total Share

Capital

100 275.25 300.00 300.06 302.78

Equity Share

Capital

100 275.25 300.00 300.06 302.78

Reserves 100 118.75 133.08 153.84 183.38

Net Worth 100 121.97 136.53 154.90 185.86

Deposits 100 123.27 165.64 199.31 254.35

Borrowings 100 116.82 167.85 11.78 243.27

Total Debt 100 123.11 165.69 194.59 254.07

Other Liabilities

& Provisions

100 122.88 141.48 161.12 172.01

Total Liabilities 100 122.99 161.89 189.40 244.16


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Comparative income statement as on

31 March 2006-2010


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Ratio Analysis

P/E ratio is 11.8 as on 31 March 2010.

Ratios 2010 2009 2008

Debt equity ratio 11.9 11.2 10.6

Gross profit % 10.9 9.36 9.77

Net profit % 16.953 14.45 16.31

Quick ratio 24.32 20.16 21.1

Interest coverage

ratio

1.367 1.33 1.4

Return on capital

employed

1.5 1.4 1.4

Return on

shareholders fund

20.74 17.5 17.5

Current ratio 0.83 0.75 0.65


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Trend of share price with time


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Deposits

Thetotal deposits ofthe Bank have grown by Rs. 4,170.46 cr

from Rs. 15,101.39 cr as on 31st March 2009 to Rs. 19,271.85 cr

as on 31st March 2010, registering a growth of 27.62 %.

Investments

The Gross investments ofthe bank grew by 39.82% to reach

Rs.6,649.44 cr as on 31st March 2010 from the level of

Rs.4,755.61 cr as attheend ofthe previous fiscal. Interest

income on investments grew by 43.36% to reach

Rs. 396.27 cr as against Rs.276.41 crearned during the last

fiscal.


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Interpretation ofresults:

Horizontal analysis shows steady increment in all segments

which is a good sign. Even in thetime ofrecession around 2008

it has been ableto maintain thattrend which may be dueto its

good management policy, foreign investment policy.

Debt Equity ratio is high (11.9) and has been morethan 10

for few years which is profitable for shareholders as they will be

ableto get more dividends though they invest less but it is notquite good for lenders. But banks do have high D/E ratios

usually and as compared to its peers it is doing well though not

a leader in it.

Gross Profitratio has increased from 9.36 to 10.9 % and

Net profitratio has increased from 14.45 to 16.9 % which is a

good point again for all stake holders and lenders. Shareholders

will be ableto get high dividends and lenders will be paid their

instalment .Their increased confidence will make organisation

ableto amass capital easily when required in future. It will

increasethe share value.

Curre

ntratio has inc

reas

ed bu

tis l

ess

than p

referre

d value

of 1.33. This increment shows banks increased ability to invest

more in other sectors.


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As quick ratio which is 24.32 and which has increased from

previous years one will bring confidence in shortterm lenders

as they would be ableto gettheir money as soon as possible.

For P/E ratio there is no definite way to conclude whether

bigger is better as we want both to be higher.

The bank has been ableto maintain stablereturns even in

time ofrecession which is a good pointthe view of investors

and lenders. Return on the capital employed is less than

preferred value means it is not so much profitableto lend to orinvest in this company when compared to others.

The graph of share priceto time shows growth. Though an

unsteady one it bears evidenceto increasing confidence in the

investors about companys prospects.

As should have

bee

n done

,the

inve

stme

nts hav

ebee

nincreased. This increased the income in the form of interests to

investments.

final financial analysis of bank

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