ratio analysis

ACKNOWLEDGEMENT

As the outset I express my deep sense of gratitude to Mr. R. Pati internal guide of (IMIT) for giving me permission to under go this training programme.

I take the opportunity to offer my sincere feeling gratitude to Mr. Sarada Kumar Das, External guide, Faculty of ACSTI, for his cooperation and advice in bringing out this project report.

Also I will be very happy to thank to MR. S. Ghose and G. Shrma for their kind cooperation.

At last my reverences in due my parents and family members for whom, I am here.

PRAKASH CHANDRA ACHARYA

REGD. NO. 0806102051

I.M.I.T.CUTTACK

DECLARATION

I do hear by declare that the Summer Project Report entitled “Ratio

Analysis” of O.S.C.B.prepared & submitted by me and this report is completely of my own

study and the guidance of Mr. R. Pati has not been submitted to any other institute or

published in any other format any time before. This report of “Ratio Analysis” is studied

in Orissa State Co-operative Bank to fulfill of Master Degree in Business Administration.

INSTITUTE OF MANAGEMENT AND INFORMATION TECHONOLOGY (IMIT) Page 1

PRAKASH CHANDRAACHARYA

REGD. NO. 0806102051

I.M.I.T.CUTTACK

CERTIFICATE OF GUIDE

This is certify that Mr. Prakash Chandra Acharya, a student of M.B.A. of

Institute of Management and Information Technology, Cuttack has undergone Eight

weeks Summer Training in ORISSA STATE CO-OPERATIVE BANK LTD. during the month of

July and August 2009 in “Ratio Analysis”. He has under gone the Training under the

guidance of Mr. S.K. Das, faculty (ACSTI) of OSCB Ltd.

I wish him all success in his life.

Mr. R. PATI

Faculty

I.M.I.T.CUTTACK

INSTITUTE OF MANAGEMENT AND INFORMATION TECHONOLOGY (IMIT) Page 2

PREFACE

According to the syllabus prescribed by B.P.U.T. Orissa. We have prepared projects for appropriate subject. This is apart of our curriculum. A project is the simplest and most suitable method for expressing the ideas for knowledge. A project is very much important and necessary a bright and shinning future.

This project has written in simple, concise and lucid form so that the reading pleasurable throughout. With due help of this project we are able to highlight our views and idea what we have gained in a particular subject .

I hope this project done by me will meet the approval of teacher.

PRAKASH CHANDRA ACHARYA

REGD. NO. 0806102051

I.M.I.T.CUTTACK

CONTENTS

CHAPTER-1 (INTRODUCTION)

INTRODUCTION

SUBJECT

PURPOSE OF THE STUDY

PLACE OF THE STUDY

SCOPE OF THE STUDY

LIMITATION

CHAPTER-2 (PROFILE)

INSTITUTE OF MANAGEMENT AND INFORMATION TECHONOLOGY (IMIT) Page 3

INTRODUCTION

HISTORY

STRUCTURE

How OSCB get Finance?

HIERARCHY OF OSCB LTD.

FUNCTION OR ROLL OF OSCB

MISSION OF OSCB

ACHIVEMENTS

CHAPTER-3 (METHODOLOGY)

METHODOLOGY

DATA COLLECTION

THE OBJECTIVES

TOOLS

CHAPTER-4 (RATIO ANALYSIS)

INTRODUCTION

NATURE

INTERPREATATION

GUIEDLINES OR PRECAUTION

USES & SIGNIFICANC

LIMITATION

CLASSIFICATION

RATIOS RELEVANCE TO STUDY

SUGESATION

CONCLUSION

INSTITUTE OF MANAGEMENT AND INFORMATION TECHONOLOGY (IMIT) Page 4

BIBILIOGRAPHY

CHAPTER-1 (INTRODUCTION)

INTRODUCTION

SUBJECT

PURPOSE OF THE STUDY

PLACE OF THE STUDY

SCOPE OF THE STUDY

LIMITATION

INTRODUCTION

Finance is defined as the provision of money when it is required .Every enterprise needs finance to start, carry out its operations. Finance is the life blood of an organization. So, finance should be managed effectively.

SUBJECT

Financial statement analysis refers to the process of determining financial strength and weakness of the firm by establishing strategic relationship between the terms of the balance sheet, Profit & loss account and other operative data.

The analysis of financial statement is a process of evaluating the relationship between different parts of financial statement. Financial statement is used for decision making by various parties are in them

INSTITUTE OF MANAGEMENT AND INFORMATION TECHONOLOGY (IMIT) Page 5

First task is used for the analysis to select the information for taking decision.

Second task is to arrange the information in a way to highlight significant relationship.

Final task is the interpretation and drawing of inferences and conclusion.

PURPOSE OF THE STUDY

The present study is made as a part of the MBA programme for summer training in the form of on the job training with following activities

To know the financial position of the OSCB Ltd.

The bank has the strength to fulfill its current obligation or not

Find out strength and weakness of the OSCB Ltd.

Performance of OSCB Ltd for granting credit providing loans and making investment.

Growth rate of OSCB Ltd.

Know the liquidity position of OSCB Ltd.

Know the long term solvency of OSCB Ltd.

To know the operating efficiency of OSCB Ltd.

Know overall profitability of OSCB Ltd.

PLACE OF THE STUDY

All the activity of the project are carried out in the OSCB Ltd, Bhubaneswar.

SCOPE OF THE STUDY

o The data and information were gathered during training.

o The scope is limited to the secondary data only.

o The scope is limited to the year 2002-03 to 2007-08.

o

LIMITATION

INSTITUTE OF MANAGEMENT AND INFORMATION TECHONOLOGY (IMIT) Page 6

Every work has a particular advantage and disadvantage. Likely to be a coin side. So there is always a boundary line, whatever is to be done. This project work has also same problem with some disadvantages. The various problems or limitation of the study are as follows:-

Time factor plays a vital role. The study was conducted with in 8 weeks.

Due to heavy burden of work getting information from staff was not possible.

The bank may or may not show true financial result in annual report.

The data provided by the organization was not up to date.

Despite of certain limitations, efforts has been taken to make the project report scientific and reliable one as far as possible.

CHAPTER-2 (PROFILE)

INTRODUCTION

HISTORY

STRUCTURE

How OSCB get Finance?

HIERARCHY OF OSCB LTD.

FUNCTION OR ROLL OF OSCB

INSTITUTE OF MANAGEMENT AND INFORMATION TECHONOLOGY (IMIT) Page 7

MISSION OF OSCB

ACHIVEMENTS

PROFILE OF O.S.C.B LTD

INTRODUCTION

The Orissa state co-operative Bank is an apex bank in Orissa has its head office in Bhubaneswar with its branch at Cuttack, Paradeep, Anugul,Roulkela. Its supports 17 central cooperative banks which in turn supports more than 4000 primary cooperative society.

The OSCB Ltd. was registered ( REGD NO- 29cu/dt-02.04.1948) under Bihar& Orissa cooperative society Act.1935 as Orissa provisional co-operative bank with its headquarters at Cuttack and functioning from 2nd April 1948.Later the bank sifted to state capital, Bhubaneswar.

LOCATION OF CCBS

INSTITUTE OF MANAGEMENT AND INFORMATION TECHONOLOGY (IMIT) Page 8

OSCB HEADQUARTERS

INSTITUTE OF MANAGEMENT AND INFORMATION TECHONOLOGY (IMIT) Page 9

INSTITUTE OF MANAGEMENT AND INFORMATION TECHONOLOGY (IMIT) Page 10

Sl.No

TRADITIONAL CLASSIFICATION FUNCTIONAL

CLASSIFICATION OF SIGNIFICANCE

SBI Group

Development Bank

1. Current Ratio2. Acid-Test Ratio3. Absolute Liquid Ratio4. Interval Measure

1. Debt/Equity Ratio2. Debt total capital Ratio3. Intrest Coverage4. Cash Flow/Debt5. Capital Gearing

1. Inventory Turnover Ratio2. Debtor Turnover3. Total Asset Turnover Ratio4. Fixed Asset Turnover Ratio5. Working Capital Turnover Ratio6. Payable Turnover Ratio7. Capital Employed Ratio

1. Gross profit ratio2. Operating ratio3. Operating profit ratio4. Net profit ratio5. Expense ratio6. Return on investment7. Return on capital8. Return on equity capital9. Earnings per share

Branches Deposits Loan

 1 Sambalpur

Saving Account

Current Account

Term Deposit

Recuring Deposit

Security

Short Term

Medium Term

Long Term

 2 Main Branch

Saving Account

Current Account

Term Deposit

Recuring Deposit

Security

Short Term

Medium Term

Long Term

 3 Saheed Nagar Branch

Saving Account

Current Account

Term Deposit

Recuring Deposit

Security

Short Term

Medium Term

Long Term

 4 Ashok Nagar Branch

Saving Account

Current Account

Term Deposit

Recuring Deposit

Security

Short Term

Medium Term

Long Term

 5 Berhumpur Branch

Saving Account

Current Account

Term Deposit

Recuring Deposit

Security

Short Term

Medium Term

Long Term

 6 Angul Branch

Saving Account

Current Account

Term Deposit

Recuring Deposit

Security

Short Term

Medium Term

Long Term