financial analysis of yes bank
TRANSCRIPT
FINANCIAL ANALYSIS OF
PRESENTED BY
SWAYAM SIBA PRADHAN (14202228)
PINAKI RANJAN BHAKAT (14202238)
SULAGNA THAKUR (14202237)
INDRANI SHOME (14202249)
SHILPA PRIYA (14202209)
RATNAPRATIM (14202204)
&
Under the Guidance of Prof. Jogendra Behera
OBJECTIVE
To comparatively analyze the Capital Structural Position of YES Bank and ICICI Bank.
Objective approached by analyzing various ratios:
Debt Equity Ratio
Funded Debt to Total Capitalization Ratio
Solvency Ratio
Interest Coverage Ratio
Capital Gearing Ratio
To comparatively analyze the Profitability of YES Bank and ICICI Bank.
Net Profit Margin
Efficiency
ROI
ROE
PROFILE OF YES BANK & ICICI BANK
YES BANK
India's fifth largest private sector Bank, is an outcome of the professional entrepreneurship of its Founder.
It operates a network of over 500 branches across 350 cities, with 1050+ ATMs.
Establish a high quality, customer centric, service driven, bank catering to the “Future Businesses of India”.
Authorised share capital of the company is Rs 600 Crores divided into 600,000,000 Equity shares of Rs 10/- each.
The bank equity shares are listed in BSE and NSE.
ICICI BANK
Second largest bank in India and largest privatesector bank in India by market capitalization.
Has a network of 2035 branches and presence in 18countries.
Committed towards its efforts to adopt technologyto achieve efficiency in its business operations.
Authorized share capital of the company is Rs 1275Crores divided into 115271442 Equity shares of Rs100/- each.
The bank equity shares are listed in BSE and NSE.
The bank is 1st Indian bank listed in NYSE
ANALYSIS OF DEBT-EQUITY RATIO
Indicates the relationship between loan and the net worth of the company, which is known as gearing.
It shows the relationship between the portion of assets provide by the stockholders and the portion of the assets
provide by the creditors.
A debt equity ratio of 1:1 is norm accepted. The higher the gearing, the more volatile the return to the
shareholders.
Debt-Equity Ratio= Long Term Debt/ Shareholders funds or Net Worth.
A high debt company is able to borrow funds on very restrictive terms and conditions.
Above trend shows that compare to the ICICI bank, YES bank depends more on outsiders fund to for financing
its expanding activities, that’s why the ratio is higher than the ICICI bank.
DEBT-EQUITY RATIO OF YES BANK & ICICI BANK
Year YES Bank ICICI
Bank
Debt in Cr. Equity in
Cr
Ratio Debt in Cr. Equity in
Cr.
Ratio
March
201031,547.65 3,089.55
10.212,96,280.17 51,618.37
5.73
March
201152,629.84 3,794.08
13.873,35,156.39 55,090.93
6.08
March
201263,308.20 4,676.64
13.533,95,664.87 60,405.25
6.55
March
201387,877.74 5,807.67
15.134,37,955.12 66,705.96
6.56
March
2014
95,506.36
7,121.74 13.414,86,672.71 73,213.32
6.64
Compound
Growth
Rate202.73% 130.51% 64.26% 41.83%
5.736.08
6.55 6.56 6.64
10.21
13.8713.53
15.13
13.41
MAR-10 MAR-11 MAR-12 MAR-13 MAR-14
Debt-Equity Ratio of YES Bank & ICICI Bank
ICICI Bank YES Bank
ANALYSIS OF FUNDED DEBT TO TOTAL CAPITALIZATION RATIO
The funded debt to total capitalization ratio establishes the relationship between the long term fund raised from
outsiders and total long term funds available from the owners of the business.
Explains the capital structure position of the company.
Normally the smaller the ratio the better it will be.
Total capitalization = Total Debt + Equity
Year YES
Bank
ICICI
Bank
Funded
Debt in
Cr.
Total
Capitaliza
tion in Cr
Ratio Funded
Debt in
Cr.
Total
Capitaliza
tion in
Cr.
Ratio
March
201031,547.65
34,637.20 0.9102,96,280.17
3,47,898.54 0.851
March
201152,629.84
56,423.92 0.9323,35,156.39
4,08,369.71 0.820
March
201263,308.20
67,984.84 0.9313,95,664.87
4,62,370.83 0.855
March
201387,877.74
93,685.41 0.9384,37,955.12
4,98,360.37 0.878
March
2014
95,506.36
1,02,628.10 0.9304,86,672.71
5,41,763.64 0.898
Compoun
d Growth
Rate 202.73% 196.29% 64.26%55.72%
TOTAL CAPITALIZATION RATIO OF YES BANK & ICICI BANK
0.851
0.82
0.855
0.878
0.898
0.91
0.932 0.9310.938
0.93
MAR-10 MAR-11 MAR-12 MAR-13 MAR-14
ICICI Bank YES Bank
Total Capitalization Ratio of YES Bank & ICICI Bank
ANALYSIS OF SOLVENCY RATIO
It shows the relationship between total liabilities to outsiders to total assets.
Measures the proportion of total assets financed by outside creditors.
It provides a measurement of how likely a company will be continue meeting its debt obligations.
Higher the ratio, the greater is the dependents of the firm on outsiders for its financing.
Lower ratio i.e. outsiders liabilities in the total capital of company the better is the long term solvency of the
company.
SOLVENCY RATIO OF DEBT TO TOTAL ASSET RATIO
Year YES Bank ICICI
Bank
External
Liabilities
in Cr.
Total
Assets in
Cr.
Ratio External
Liabilities
in Cr.
Total
Assets in
Cr.
Ratio
March
2010 33,292.9736,382.50
0.91 3,11,781.353,63,399.71
0.85
March
2011 55,212.9159,007.00
0.93 3,51,142.744,06,233.67
0.86
March
2012 68,985.4873,662.12
0.93 4,28,663.564,89,068.80
0.87
March
2013 93,296.4699,104.12
0.94 4,70,088.725,36,794.69
0.87
March
2014 1,01,894.061,09,105.79
0.93 5,21,428.265,94,641.60
0.87
Compound
Growth
Rate 206.05% 199.88% 67.24% 63.63%
0.85
0.86
0.87 0.87 0.87
0.91
0.93 0.93
0.94
0.93
MAR-10 MAR-11 MAR-12 MAR-13 MAR-14
Solvency Ratio of YES Bank & ICICI Bank
ICICI Bank YES Bank
ANALYSIS OF CAPITAL GEARING RATIO
It is the relationship between the loan and net worth of the company.
Gearing is the measure of Financial Leverage.
This ratio is interpreted by Highly geared and Low geared.
High geared means low proportion of Equity and vise-versa.
The firm ICICI Bank is more low geared compared to YES Bank. For a firm like YES Bank and ICICI Bank
being low geared is good. It means firm is taking advantage of it by increasing the return of shareholders.
CAPITAL GEARING RATIO OF YES BANK & ICICI BANK
Year YES
Bank
ICICI Bank
Equity in
Cr.
Funded
Debt in
Cr.
Ratio Equity in
Cr.
Funded Debt
in Cr.
Ratio
March
20103,089.55 31,547.65
0.09751,618.37 2,96,280.17
0.174
March
20113,794.08 52,629.84
0.07255,090.93 3,35,156.39
0.164
March
20124,676.64 63,308.20
0.07360,405.25 3,95,664.87
0.152
March
20135,807.67 87,877.74
0.06666,705.96 4,37,955.12
0.152
March
20147,121.74
95,506.36
0.07473,213.32 4,86,672.71
0.150
Compoun
d Growth
Rate
130.51% 202.73% 41.83% 64.26%
0.097
0.072 0.0730.066
0.074
0.174
0.1640.152
0.1520.15
MAR-10 MAR-11 MAR-12 MAR-13 MAR-14
Capital Gearing Ratio of YES Bank & ICICI Bank
YES Bank ICICI Bank
ANALYSIS OF INTEREST COVERAGE RATIO
The coverage ratio establishes relationship between fixed claims & the firm’s profitability out of which these
claims are to be paid.
This measure tries to relate profitability to level of debt payments to assess the degree of comfort with which
the firm can meet these payments.
It helps to analyze the firm’s ability to service the fixed interest claim.
Interest Coverage Ratio= EBIT/Interest
Ideally the ratio should be 1.5 or higher.
The lower the ratio, the more the company is burdened by debt expense.
When a company's interest coverage ratio is 1.5 or lower, its ability to meet interest expenses may be
questionable. An interest coverage ratio below 1 indicates the company is not generating sufficient revenues to
satisfy interest expenses.
INTEREST COVERAGE RATIO OF YES BANK & ICICI BANK (FROM P/L AC.)
Year YES
Bank
ICICI
Bank
EBIT in
Cr.
Fixed
Interest
Charges
in Cr.
Ratio EBIT in
Cr.
Fixed
Interest
Charges
in Cr.
Ratio
March
2010 726.491,581.76
0.45 5,345.3217,592.57
0.30
March
2011 1092.182,794.82
0.39 6,760.7116,957.15
0.39
March
2012 1450.024,691.72
0.30 8,803.4322,808.50
0.38
March
2013 1925.736,075.21
0.31 11,396.6926,209.18
0.43
March
2014 2326.28 7,265.09 0.32 13,968.1727,702.59
0.50
Compoun
d Growth
Rate 238.63% 359.30% 143.73% 57.46%
0.3
0.39 0.38
0.43
0.5
0.45
0.39
0.3 0.31 0.32
MAR-10 MAR-11 MAR-12 MAR-13 MAR-14
Interest Coverage Ratio of YES Bank & ICICI Bank
ICICI Bank YES Bank
CAPITAL STRUCTURE OF YES BANK AND ICICI BANK
1000
1050
1100
1150
1200
1250
1300
2014 2013 2012 2011 2010
2013 2012 2011 2010 2009
Capital Structure of ICICI Bank
Authorized Capital Issued Capital
0
100
200
300
400
500
600
700
2014 2013 2012 2011 2010
2013 2012 2011 2010 2009
Capital Structure of YES Bank
Authorized Capital Issued Capital
A mix of a company's long-term debt, specific short-term debt, common equity and preferred equity. The
capital structure is how a firm finances its overall operations and growth by using different sources of funds.
Debt comes in the form of bond issues or long-term notes payable, while equity is classified as common stock,
preferred stock or retained earnings. Short-term debt such as working capital requirements is also considered to
be part of the capital structure.
PROFITABILITY RATIOSANALYSIS OF NET PROFIT MARGIN
Year YES Bank ICICI Bank
PAT Revenue Ratio PAT Revenue Ratio
March 2010 477.74 2,945.240.162
4,024.98 32,999.360.121
March 2011 727.14 4,665.020.155
5,151.38 32,621.940.157
March 2012 977 7,164.480.136
6,465.26 41,045.410.157
March 2013 1,300.68 9,551.430.136
8,325.47 48,421.300.171
March 20141,617.78 11,702.93 0.138
9,810.48 54,606.020.179
Net profit Margin calculated by –
Profit After Tax (PAT)/Revenue
NPM indicates the management’s efficiency in
manufacturing, administering and selling the
products. The ratio is the overall measure of the
firm’s ability to turn each rupee sales into net profit.
This ratio also indicates the firm’s capacity to
withstand adverse economic conditions.
A firm with a high Net Profit Margin would be an
advantageous position to survive in the face of
falling selling price, rising cost of production or
declining demand for the product. It would really be
difficult for a low net profit margin firm to
withstand these adversities.
Comparing on the basis of Net Profit Margin
between these two banks, we conclude that ICICI
bank performance is better than YES bank showing
increasing trend, whereas in case of YES bank the
trend is decreasing year wise.
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
0.18
0.2
Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Trend of Net Profit Margin
YES Bank ICICI Bank
ANALYSIS OF EFFICIENCY
Year YES Bank ICICI
Bank
Expenses* Revenue Ratio Expenses* Revenue Ratio
March 2010885.75
2,945.240.30 11,381.80
32,999.360.34
March 20111,143.07
4,665.020.24 10,513.41
32,621.940.32
March 20121,495.76
7,164.480.20 11,771.66
41,045.410.28
March 20132,175.54
9,551.430.22 13,886.65
48,421.300.28
March 20142,820.06 11,702.93 0.24 17,092.96
54,606.020.31
A Bank Efficiency Ratio is a measure of a
bank's overhead as a percentage of its revenue.
Calculated by --
Bank Efficiency Ratio = Expenses* / Revenue
Efficiency Ratio 0.30 means that it costs YES bank
0.30 to generate 1 of revenue.
The bank efficiency ratio is a quick and easy
measure of a bank's ability to turn resources into
revenue. The lower the ratio, the better (50% is
generally regarded as the maximum optimal ratio).
An increase in the efficiency ratio indicates either
increasing costs or decreasing revenues.
Comparing YES bank and ICICI bank on the basis of
Efficiency, the performance of YES bank is better
than its competitor ICICI bank.
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Trend of Efficiency
YES Bank ICICI Bank
*Not including Interest Expenses
ANALYSIS OF ROE
Year YES Bank ICICI
Bank
PAT Net Worth Ratio PAT Net Worth Ratio
March 2010 477.74 3,089.550.154
4,024.98 51,618.370.077
March 2011 727.14 3,794.080.191
5,151.38 55,090.930.093
March 2012 977 4,676.640.208
6,465.26 60,405.250.107
March 2013 1,300.68 5,807.670.223
8,325.47 66,705.960.124
March 20141,617.78 7,121.74 0.227
9,810.48 73,213.320.133
ROE is calculated by –
ROE = Profit After Tax (PAT)/Net Worth
ROE indicates how well the firm has used the
resources of owners. It is one of the most important
relationships in financial analysis.
The earning of a satisfactory return is the most
desirable objective of a business. The ratio between
net profit to owner’s equity indicates the extent to
which this objective has been accomplished.
Comparing YES bank and ICICI bank on the basis of
ROE, both the bank performance is better as the ratio
is increasing year wise but comparatively YES bank’s
performance is better than ICICI bank as it has more
properly used the owners resources.
As ROE is greater in case of YES bank, so there is
large financial leverage or Trading on Equity i.e YES
bank is magnifying the shareholders’ return through
the use of debt.0
0.05
0.1
0.15
0.2
0.25
Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Trend of ROE
ICICI Bank YES Bank
ANALYSIS OF ROI
Year YES Bank ICICI
Bank
EBIT*(1-T) Total Assets Ratio EBIT*(1-T) Total Assets Ratio
March 2010479.4834
36,382.500.013 3527.911
3,63,399.710.009
March 2011720.8388
59,007.000.012 4462.069
4,06,233.670.010
March 2012957.0132
73,662.120.012 5810.264
4,89,068.800.011
March 20131270.982
99,104.120.012 7521.815
5,36,794.690.014
March 20141535.345 1,09,015.79 0.014 9218.992
5,94,641.600.015
The term investment refer to the total assets or net
assets.
Mainly two types of approach are there to calculate
ROI. Conventional Approach of calculating ROI is to
divide PAT by investment. As PAT represents the
residue income of shareholders therefore it is
conceptually unsound to use PAT in ROI calculation.
Appropriate Approach of ROI calculation is
ROI = ROTA = EBIT*(1-T)/Total Assets
ROI is the benefit to the investor resulting from an
investment of some resource. A high ROI means the
investment gains compare favourably to investment
costs. In one way it is one way of considering profits
in relation to capital invested.
Both the banks performed well when considering ROI,
but ICICI bank trend is increasing comparing YES
bank. But last financial year YES bank also performed
well as its trend increases from previous.0
0.002
0.004
0.006
0.008
0.01
0.012
0.014
0.016
Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
Trend of ROI
ICICI Bank YES Bank
T=Corporate Tax (34%)
FINDINGSRatios Performance of YES Bank Performance of ICICI Bank
D/E Ratio
Total Capitalization Ratio
Solvency Ratio
Capital Gearing Ratio
Interest Coverage Ratio
Net Profit Margin
Efficiency
ROE
ROI
0.00
2,000.00
4,000.00
6,000.00
8,000.00
10,000.00
Mar-10 Mar-11 Mar-12 Mar-13 Mar-14
NET PROFITICICI Bank YES Bank
BIBLIOGRAPHY
www.moneycontrol.com
www.profit.ndtv.com
en.wikipedia.org
www.yesbank.in
www.icicibank.com
www.investopedia.com