PROFITABILITY ANALYSIS OF SWORNASRI SAVING

& CREDIT CO-OPERATIVE LTD

Submitted By:

Dipesh Rauniyar

Janapriya Multiple Campus

Roll NO: - 442 / 2020

T.U.Regd. No. : 7-2-297-208-2016

A Project Work Proposal

Submitted To:

Research Management Committee

Faculty of Management

Janapriya Multiple Campus

In partial fulfillment of the requirement of the degree of

Bachelor of Business Studies (BBS)

Pokhara

Jan, 2020
 TABLE OF CONTENTS

Chapter: 1 Introduction Page no

1.1 Background of the study 1

1.2 Statement of the Problem 2

1.3 Objective of the Study 2

1.4 Significance of the Study 2

1.5 Review of Literature 3

1.5.1 Theoretical Reviews 3

1.5.2 Review of Previous Study 3

1.6 Research Methodology 4

1.6.1 Research Design 4

1.6.2 Nature and Sources of Data 4

1.6.3 Population and Sample 4

1.6.4 Data Collection Techniques 5

1.6.5 Data Processing and Analysis 5

1.7 Limitation of Study 5

1.8 Organization of the Study 6

1.9 Time-Work Schedule 7

Reference
 LIST OF ABBEREVIATIONS

Abbreviations Meaning

B.S = Bikram Sambat

B.B.S = Bachelor of Business Studies

Ltd = Limited

T.U = Tribhuvan University

Regd = Registered

& = And

ROA = Return on assets

ROE = Return on shareholder’s equity

ROI = Return on investment

EPS = Earning per share

ROTD = Return on Total Deposit

 CHAPTER -1

INTRODUCTION

1.1 Background

“A bank is an organization whose principal operations are concerned

with accumulation of the temporarily idle money of the general public for the purpose
of advancing for expenditure.”

According to the consensus 2048 B.S, Swornasri Saving & Credit Co-
operative Ltd was established on shrawan 21 th 2070 B.S .The main goal of this Co-
operative society is to invest each and every scatter money as well as the skills of the
people throughout the kaski district in the field of productive work as well as income
source. This organization is investing collected money in a good activity from which
the share holder’s and other member groups would be benefited. Swornasri Saving &
Credit Co-operative Ltd has become one of the former Co-operative society for
paying their income tax in time.

Profitability ratio is a ratio used for financial analysis of a business firm.

Maximization of profit is the main objective of each and every business concern. It is
very necessary to earn maximum profit for the successful running of a business.
Profitability ratio can be measured in two ways. They are profitability in relation to
sales or return on sales and profitability in relation to investment.

This research is focused on study of profitability of Swornasri Saving & Credit

Co-operative Ltd ,As it is one of the leading commercial bank which is due to its past
performance and records of accomplishments. Profitability ratios focus on a
company’s return on investment in inventory and other assets. It is used to judge
weather companies are making enough operational profit from their assets.
Profitability ratio relate to efficiency ratio because they show how well company are
using their assets to generate profit.
1.2 Statement of the Problem:
Profitability analysis are used almost universally by companies of all size
to provide numerical information on the profitability, health and direction of the
business. Profitability analysis provides useful data and can help drive
management towards making better decision if they are interpreted correctly.
Ratio analysis is a bad choice for comparing one company to another, even
though they are often used that way. Since ratios are mostly affected by choice of
accounting policies used in financial statement.
There are various problem statements regarding profitability ratios. Some
are as follows:
1. How to determine profitability under ROA, ROE, EPS and IETA?
2. Why is there no measurement of management quality?
3. Is ratio analysis is based on book value?
4. What are the various profitability position for five years?

1.3 Objectives of the Study

The main objective of profitability ratio analysis of a commercial bank is it

should understand what a ratio means and why they would be useful in
comparing financial data. It should be familiar with the primary areas that are
covered by the use of profitability ratio analysis. It should know how to use ratio
analysis. The specific objectives of the profitability ratio are as follows:
 To know the security and solvency of the concern.
 To determine the trend of profitability.
 To judge the efficiency of management.
 To ascertain the financial strength.
1.4 Significance of the Study
This study will help to know the overall result/performance of the
organization and will also help in improving in required field. The significance of
the study can be explained as follows:
 This study will help the respected co-operative bank to know their needs
and problems of their customers.
 This study will also help the co-operative bank to find out their weakness
and strength .
  This study will help in profit maximization.
 This study will be useful for further research and this study can be used for
secondary data for future use.
1.5 Review of Literature

Review of literature is build upon the existing literature and research related
to the present study with a view to find out what had already been studied. According
to Wolf & Pant “the purpose of the reviewing the literature is to develop some
expertise in one’s area, to see what new contribution can be made and to review some
idea for developing research design”. This position has been divided into two parts:

a) Theoretical Reviews
b) Review of Previous Study
1.5.1 Theoretical Reviews

Theoretical review is an important component for every study, without clear

concept on subject matter the study may not get through the right track. Theoretical
review helps us to determine the various independent variables that are associated
with the core dependent variable of the study, hence, giving the study a fixed
foundation. Co-operative banks are one of the financial institutions which provides an
individual with different facilities.

Profitability position shows the overall efficiency of the business concern.

The earning capacity of a business is measured by profitability position. Profitability
positions are the result of a number of policies and decision. It shows the liquidity
assets management and operating results.

1.5.2 Review of Previous Study

The purpose of literature is to find out what research studies have been
conducted and what remain to be done. And as we know that profitability ratio
analysis is done to measure the operating efficiency of the company. The researcher
has found some field work report in similar topic “Profitability analysis” from
different thesis and past reports. Where the researcher has shown different analysis
method of profitability with the trend.
1.6 Research Methodology

In the research methodology, it contains various methods and technique, which

are used in the process of research studies. Research methodology includes wide
range of methods including quantitative and qualitative technique for data analysis
and presentation. It is followed to achieve the basic goal of this research.
Methodology research includes research design, nature and sources of data,
population and sample, data collection technique, data processing and analysis.

1.6.1 Research design

The research design consists of working procedures for collecting,

measurements and analysis of data for the research project. Under descriptive research
design the analytical research design has been used for the study.it also focuses on
explanation of profit. So this study had followed both analytical and explanatory
method for research.

1.6.2 Nature and Sources of Data

The data has been received by 1 hour briefing direct from the working manager
of the related financial institution. This research is based on both qualitative
quantitative type of data collection.

Primary data is the data that is collected by a researcher from first –hand sources,
using methods like surveys, interview, or experiments. It is collected with the research
project in mind, directly from primary sources. This research is based on primary data
whereas; Secondary data refers to those data which is collected by someone else.

1.6.3 Population and Sample

According to research population is the number of units or people

associated at the time of research. The method of sampling in the report is simple
random. This report is of Swornasri Saving and Credit Co-operative Ltd. This co-
operative bank doesn’t have any other branches. The organization is situated at
pokhara, sabhagriha chowk which is also called as sample size in a research.
1.6.4 Data Collection Techniques

Data collection techniques are the procedures or ways that are used to collect
data on the required research topic. This research is based on primary data, so the data
that will be used in this report is gather directly from the manager of the organization
through interview, annual reports and website. Secondary data are also used in it for
data presentation and comparison of 5 year data.

1.6.5 Data Processing and Analysis

The quantitative data from both primary and secondary sources will be used in
analysis for the purpose of this study. This research is based on profitability analysis.
So, ratio analysis tools are going to be used in this project. The ratio analysis tools
that are going to be used in this research are as follows:

a) Return on Assets Ratio(ROA)

b) Return on Shareholder’s Equity Ratio(ROE)
c) Return on Investment Ratio(ROI)
d) Earning Per Share(EPS)
e) Return on Total Deposit(ROTD)

Every ratio analysis tools will be compared for 5 years in a tabular form.

1.7 Limitation of the Study

As we know that in this world there is no perfection. Every things have their own
limitation, even though people try to improve it there still remains some loopholes
in it. According to this report the major limitation of this study are as follows:

 This study is mainly based on secondary data collected from annual

financial reports and journals
 This study covers only 5 fiscal year for study period.
 This research is only based for profit maximization.
 This study has very limited area as it doesn’t have any branches.
 This study is mainly focused on quantitative then qualitative.
1.8Organization of the Study

The research will be divided in five chapter. They are as follows:

I. Introduction

This chapter deals with the subject matter of the study consisting
background of the study, details of the company, statement of the problem, objective
of the study, significance of the study and limitation of the study .

II. Review of the Literature

This chapter deals with review of the different literature of the study field.
Therefore it includes theoretical reviews and review of the previous study of the same
topic.

III. Research Methodology

This chapter includes research design, population and sample, sources of

nature, data processing and method of analysis of the research.

IV. Results and Findings

This chapter shows the result of the analysis and the different major finds
of the research.

V. Summary, Conclusion and Recommendation

This last chapter summarizes the result of the analysis and required
recommendation needed for the company.
 1.9 Time Work Schedule

This duration of project has been defined for eight weeks by Tribhuvan University
(T.U), Facility of Management (FOM). Therefore, to fulfill this requirement,
project report was done for eight weeks starting from 17th poush to 15th fagun
2076. It was an adequate duration designed for a Bachelor’s level student to
understand the future workplace environment. This research will be completed
tentatively within 8 weeks. Detail research schedule is presented in table below:

S.N Title Estimated Time Taken

1 Introduction 1 week
2 Literature Review 2 weeks
3 Research Methology 1 week
4 Data Presentation and Data Analysis 3 weeks
5 Conclusion and Recommendation 1 week
Total 8 weeks

References
Chaudhari, M.An introduction to banking- liquidity risk and assets liabilities
management, West Sussex, UK: WILEY.

Panday, Dhurbalal (2008). Office practice and accounting, Kathmandu: Asian

publication distributors.

Agrawal, Govinda Ram, (2003), Project Management in Nepal, Kathmandu:

publication distributors.

Website:

www.google.com