CONTENTS

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“Financial Analysis with Reference of Kotak Mahindra Bank”

AKASH KUMAR R
(6th Sem) BBA
The oxford college of business management, Bangalore -560102
Email- skydevvv@gmail.com

Prof.
Assistant Professor,
The oxford college of business management, Bangalore -560102
Email- @gmail.com

Abstract:

“Effective financial management is the key for running a financially successful business. The
term financial analysis is also referred as financial statement analysis. Financial statements
report profitability and financial position of the business at the end of financial year. Financial
analysis helps to determine the financial strength and weakness of the firm by establishing
strategic relationship between the items of balance sheet and profit and loss account. The main
objective of the study is to compare and analysis the financial statements for the past ten
financial years and also to Analysis and interpret the liquidity, efficiency, profitability and
solvency position of Kotak Mahindra Bank. For the purpose of the study various methods and
techniques are used in financial analysis such as comparative statements analysis, common size
statement analysis, trend analysis and ratio analysis. Financial analysis Are used by many
including Shareholders, Debenture holders, Creditors, Commercial, Financial Institutions,
Managers or Management, Government Departments, SEBI and Stock Exchanges.

Keywords: Industry Analysis, Company Analysis, Comparative Statements Analysis, Common

Size Statement Analysis, Trend & Ratio Analysis.

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CHAPTER-1
GENERAL INTRODUCTION

1.1 INTRODUCTION:
According to john Myer, “financial statement analysis is largely a study of relationship among
the various financial factors in a business as disclosed by single set of statements and a study of
the trend of these factors as shown in a series of statements. Financial performance analysis is
the process organizing the financial strength and weaknesses of entities by accurately
establishing a relationship between the items of balance sheet and profit and loss account. This
process identifies the growth of the organization. It helps in both long-term and short-term.
Establishing relationship between the financial elements of the organization this analysis helps
in understanding the firm’s position in better way. There are several ways of financial analysis
such as ratio analysis. This analysis also helpful determining the credit worthiness of a new
customer and evaluate the market position of the competitors. The current finance assignment
aimed to discuss the financial performance of Kotak Mahindra Bank. To conduct the study,
relevant data were selected from the bank's annual report for the period 2010-2020. The report
initiates with the introduction followed by the financial performance of the company. It
discusses the financial strategy of the company with the last 10years financial highlight. The
other part of the report reviews the financial statements in detail whereby it is noted that the
company is trading at its highest levels in recent time and the chart shows the upward trend.
Apart from the financial statement analysis, the report introspects regarding the growth and
earnings followed by evaluating the financial statement. Lastly, the events happening after the
balance sheet date deserve a special mention so that the shareholders can get a complete
picture of the company

The study involves various ratios like Liquidity Ratios, Leverage ratios/solvency ratios,
Activity/Turnover ratios and Profitability ratios. The findings of the study reveal that as per liquid
ratio and cash ratio it was ascertained that the banks day to day cash management is good
which helps in current asset management so the liquidity position of Kotak Mahindra Bank is

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good. Fixed asset turnover Ratio has increased in 2020 so the fixed assets have been effectively
used but current asset turnover ratio and capital turnover ratio are showing decreasing trends.
Hence in this regard the bank should be in a position to meet debt obligations and reduce
expenses in order to improve efficiency of bank. As per debt equity ratio the bank is trying to
increase its leverage along with ROE and proprietary ratio owner’s stake in total assets as it is
seen increasing in recent years so bank is improving its solvency position. As per gross profit
ratio and net profit ratio it is observed that sales are increasing but the bank need to ensures
adequate return to the owners by increasing return on equity capital ratio. So the banks overall
profitability is in better position the bank ensures adequate return to the owners and the banks
overall profitability is in better position. The suggestion provided in study to increase its number
of branches in the state, check on unnecessary operating expenses by using automation, use
channel optimization and check staff productivity, to review the capital requirements and
relative capital costs and sell of ideal assets to improve profitability and financial position of the
business which might certainly help the bank to inculcate the same and reap profits ahead.

History-Kotak Mahindra Bank: It is an Indian private sector bank with its headquarters at
Mumbai, Maharashtra Kotak Mahindra Finance Ltd., the flagship company was granted the
license to carry on banking business by Reserve Bank of India in February 2003, a wide range of
banking products and financial services for corporate and retail customers are provided by
Kotak. These services are provided through a variety of delivery channels and specialized
subsidiaries such as: Personnel financing, Investment banking, General insurance, Life insurance.
Its network of 1,369 branches across 689 locations and 2,163 ATMs in the country (as of 31
March 2017). As of 2018 it is the second largest private bank in India by market capitalization
after HDFC Bank. Established in 1985, Kotak Mahindra Finance Capital Management Limited, the
flagship company of the Kotak Group, started off as a non-banking financial services company,
initially providing financing for the purchase of automobiles. In 2003 it became the first ever
NBFC to be converted into a bank.3Despite its humble beginnings, Kotak today is one of India’s
fastest growing banks, which caters to wide variety of banking needs of both individuals and
corporates. It provides consumer banking services, commercial banking services, investment
banking 15 subsidiaries across India and the world and a few joint ventures, Kotak has spread its
businesses wide across the market and country with over 600 operating branches. Currently,
Kotak is primarily promoted by Mr. Uday Kotak who continues to hold about 39.69% of the
capital interest and is listed on the NSE, BSE and LSE1

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2 REVIEW OF LITERATURE:

2.1 Nagalekshmi V S, Vinetha S Das (2018): Found that the positive impact of
merger of Kotak Mahindra Bank Ltd with ING-Vysya Bank. It also found that momentous
increment in various budgetary angles like operating profit, net profit, earnings per share,
interest earned, return on assets, equity share capital, income on investments etc.

2.2 Vinod Kumar and Bhawna Malhotra (2017): attempted has been made to
evaluate the performance & financial soundness of selected Private Banks in India for the period
2007-2017. CAMEL approach ha s been used. This study concluded that the Axis bank is ranked
first under the CAMEL analysis followed by ICICI bank. Kotak Mahindra occupied the third
position. The fourth position is occupied by HDFC bank and the last position is occupied by
IndusInd bank amongst all the selected banks.

2.3 Grundy: (1992): in the article discusses about the competitive and financial analysis,
which is required by a firm for strategic and operational decision making. The research
mentioned in the required in the financial managers to careful thinking of the linkages between
competitive and financial analysis. The success factor depends on the ability to manage
behavioural variables effectively. Conclusion can be made that competitive and financial
business analysis helps the firm for making better strategic decision.

2.4 McMahon & Davies (1994):in the articles talks about the small enterprises and
importance of developing skills regarding financial statements analysis and interpretation.
Article points out that because of growth financial stress is created in such firms, which can be
improved through upgrading of financial analysis and reporting systems. The article aims to find
out possible relation between the historical financial reporting and analysis and achieved growth
rate and financial performance.

2.5 Eberl & Schwaiger (2005: in the article aims to research the impact of the
corporate’s reputation on their future financial performance while taking the past financial
performance influence on the present reputation into account. A firm`s reputation depends on

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the stakeholder`s interactions and the transactions with the firm. Two distinct reputational
components, organizational competence and sympathy are hypothesized as effecting the
financial performance differently. Organization’s performance is measured on the perception of
financial performance in the eyes of the stakeholders or measures reported by the company
itself.

2.6 Zuckerman (1995): presents the article, which is about the financial statements that
are very important as when analysed, they reveal financial condition, health, operating trends
and future prospects of the firm article has tried to find and suggest ways to provide framework
to automate the customizing of analysis according to the firms customer or industry needs. The
article aims for standard automated comparative spreadsheet that will provide detailed
summary of most significant line items and also few analytical ratios. An appropriate analytical
methodology suggested in the article is key components of balance sheet, income statements
and cash flows. The article suggests certain approaches to interpret ratios like trend analysis,
general standards.

2.7 Mautz & Angell (2006): in the article has talked about the financial statements
which help the creditors and the investors to get the financial history, current performance,
future cash flows, trends and price appreciations. The article aims to introduce and illustrates
techniques to make financial analysis. The article provides an overview on the financial
statement analysis, financial performance and analytical tools. It also discusses about financial
ratios and its implications and also DuPont analysis. The article concludes that the results from
these methods can be connected to the management actions which will help to improve
performance and use their time efficiently and effectively. The financial statement analysis helps
to assess the creditworthiness of the potential borrowers and also provides opportunity for the
lenders to protect value of their loans.

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CHAPTER-2
DESIGN OF THE STUDY

DESIGN OF THE STUDY:

2.1 METHODOLOGY:
This study is quantitative in nature meaning it primarily deals with financial statements Of kotak
Mahindra Bank over the past ten years. This study is based on secondary data which is mainly
taken from the Banks website and the annual reports published by the Reserve Bank of India.
This study considers the data which have been collected from the Bank website to identify and
explain the progress of Kotak Mahindra Bank over the past ten financial years.

• Kotak Mahindra Bank annual report.

• Kotak Mahindra Bank balance sheet and income statement for past ten years.
• Company website - www.kotak.com
Other websites - Ibef.org, www.moneycontrol.com, www.bseindia.com, www.google.com

2.2 OBJECTIVES OF THE STUDY:

1.To evaluate the financial efficiency of Kotak Mahindra Bank.

2.To analysis the liquidity and solvency position of the bank.

3.To find changes in the trends of the bank using trend analysis

4.To understand the customer services being provided by the KOTAK MAHINDRA BANK

5.To about expectations and requirements of the customer from KOTAK MAHINDRA BANK

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6.To find out whether customer are fully satisfied with the services of KOTAK MAHINDRA BANK

7.To know about the deficiencies felt by the customer

8.To make recommendations for the improvements on KOTAK MAHINDRA BANK customer
services

2.3 SCOPE OF THE STUDY:

1. By the help of this study, the bank will be able to know is present situation. Thus, the
management will be able to take necessary measures by paying more attention on the sectors
which are outperforming and by this study they will also came to know what all the things the
Customers want

2. With the help of this study the company will be able to attract and build a large customer
base as they will be able to know the taste and preferences of the customers.

2.4 sampling method:

The sample design adopted for this study is probably proportional to size as it has following
advantages:

1. It provides the heavily expected non response of many smaller operations.

2. It provides a simple sample selection rule that allows flexibility in using most up-to-date data
from a variety of sources, thus minimizing the sample size

2.5 LIMITATIONS OF THE STUDY:

1.The study is restricted only the ten financial years only

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2. The study is completely based on secondary data and the accuracy of the analysis depends
vastly upon the accuracy of the data obtained.
to be considered
3. This study may not be extensive enough to cover all the ratios in evaluating the financial
health of a bank accurately.

CHAPTER-3
INDUSTRY PROFILE AND COMPANY PROIFLE

3.1 INDUSTRY PROFILE:

According to section 5(b) Banking regulation Act 1949 Banking means “Accepting deposits for
the purpose of lending or investment of deposits of money from the public, repayable on
demand or otherwise and withdraw by cheque, draft or otherwise”.

Reserve Bank of India is the Central Bank of our country. It was established on 1 st April 1935
accordance with the provisions of the Reserve Bank of India Act, 1934. It holds the apex
position in the banking structure. No company shall carry on banking business in India unless it
holds a licence issued in that behalf by the Reserve Bank and any such licence may be issued
subject of such conditions as the Reserve Bank of India under section 22. The banking sector is
nothing less than the backbone of Indian economy. As it helps in implementing monetary
policy, growth of capital market, Capital formation, Promote savings and investment habits of
the people, Promotion of new entrepreneurs and financial assistance to agriculture sector etc.
Banking structure in India involves Scheduled and Non-Scheduled Banks scheduled banks are

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classified into commercial and cooperative banks. Commercial bank includes public sector,
private sector, foreign banks and regional rural banks.

3.2 COMPANY PROFILE:

In 1985 Uday Kotak founded an Indian financial services conglomerate. In February 2003, the
Reserve Bank of India (RBI) issued a banking licence to Kotak Mahindra Finance Ltd(KMFL)., the
group's flagship company This approval created banking history since Kotak Mahindra
Finance Ltd. is the first non–banking finance company in India to convert itself in to a bank as
Kotak Mahindra Bank Ltd. It is Indian private sector bank headquartered in Mumbai,
Maharashtra, India.

In a study by Brand Finance Banking 500 published in February 2014 by Banker magazine (from
The Financial Times stable), KMBL was ranked 245th among the world's top 500 banks with
brand valuation of around half a billion dollars ($481 million) and brand rating of AA+. As of
April 2019, it is the second largest Indian private sector bank by market capitalization, with
1600 branches & 2519 ATMs

3.3 FORMATION OF THE COMPANY:

The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance Limited.
This company was promoted by Uday Kotak, Sidney A. A. Pinto and Kotak & Company.
Industrialists Harish Mahindra and Anand Mahindra took a stake in 1986, and that's when the
company changed its name to Kotak Mahindra Finance Limited. Since it has been a steady and
confident JOURNEY to GROWTH AND SUCCESS. The general management include Mr. Uday
kotak an executive vice chairman, & MD, Mr. C.JAYARAM, MR. DIPAK GUPTA

3.4 PROGRESS SO FAR…..

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1986-Kotak Mahindra Finance Limited starts the activity of Bill Discounting.

1987-Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market.

1990-The Auto Finance division is started.

1991-The Investment Banking Division is started. Takes over FICOM, one of India’s largest
financial retail marketing network.

1992-Enters the Funds Syndication sector.

1995-Brokerage and Distribution businesses incorporated into a separate company - Kotak

Securities. Investment Banking division incorporated into a separate company - Kotak Mahindra
Capital Company.

1996-The Auto Finance Business is hived off into a separate company - Kotak Mahindra Prime
Limited (formerly known as Kotak Mahindra Primus Limited). Kotak Mahindra takes a significant
stake in Ford Credit Kotak Mahindra Limited, for financing Ford vehicles. The launch of Matrix
Information Services Limited marks the Group’s entry into information distribution.

2000-Kotak Mahindra ties up with Old Mutual plc. For the Life Insurance business. Kotak
Securities launches its on-line broking site (now www.kotaksecurities.com). Commencement of
private equity activity through setting up of Kotak Mahindra Venture Capital Fund.

2001-Matrix sold to Friday Corporation Launches Insurance Services 2003 Kotak Mahindra
Finance Ltd. converts to a commercial bank – the first Indian company to do so.

2004-Launches India Growth Fund, a private equity fund.

2005-Kotak Group realigns joint venture in Ford Credit; Buys Kotak Mahindra Prime (formerly
known as Kotak Mahindra Primus Limited) and sells Ford credit Kotak Mahindra.

2006-Bought the 25% stake held by goldman sach`s in kotak Mahindra capital co.& kotak
securities.

2008-Launched a pension fund under NEW PENSION SYSTEM.

2009-It opened a representative office in DUBAI. Entered AHMEDABAD COMMODITY

EXCHANGE as anchor investor.

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2010-AHMEDABAD DERIVATIVES & COMMODITY EXCHANGE, a kotak anchored enterprise,

became operational as a NATIONAL COMMODITY EXCHANGE.

3.4 KOTAK MAHINDRA BANK LIMITED:

OUR BUSINESSES OR WE CAN SAY “MULTIPLE BUSINESSES ONE BRAND”.Kotak Mahindra Bank
Ltd is a one stop shop for all banking needs. The bank offers personal finance solutions of every
kind from savings accounts to credit cards, distribution of mutual funds to life insurance
products. Kotak Mahindra Bank offers transaction banking, operates lending verticals, manages
IPOs and provides working capital loans. Kotak has one of the largest and most respected
Wealth Management teams in India, providing the widest range of solutions to high net worth
individuals, entrepreneurs, business families and employed professionals.

KOTAK’S BUSINESES:
(1) KOTAK MAHINDRA CAPITAL COMPANY LIMITED: Kotak Mahindra Capital
Company Limited (KMCC) is India's premier Investment Bank and a Primary Dealer (PD)
approved by the RBI. KMCC's core business areas include Equity Issuances, Mergers &
Acquisitions, Structured Finance and Advisory Services, Fixed Income Securities and Principal
Business.

(2) KOTAK SECURITIES: Kotak Securities Ltd. is one of India's largest brokerage and
securities distribution house in India. Over the years Kotak Securities has been one of the
leading investment broking houses catering to the needs of both institutional and non-
institutional investor categories with presence all over the country through franchisees and co-
coordinators. Kotak Securities Ltd. offers online (through www.kotaksecurities.com) and offline
service based on well-researched expertise and financial products to the non-institutional
investors.

(3) KOTAK MAHINDRA PRIME LIMITED: Kotak Mahindra Prime Limited (KMP)
(formerly known as Kotak Mahindra Primus Limited) has been formed with the objective of
financing the retail and wholesale trade of passenger and multi utility vehicles in India. KMP

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offers customers retail finance for both new as well as used cars andwholesale finance to
dealers in the automobile trade. KMP continues to be among the leading car finance companies
in India.

(4) KOTAK MAHINDRA ASSET MANAGEMENT COMPANY : Kotak Mahindra

Asset Management Company (KMAMC), a subsidiary of Kotak Mahindra Bank, is the asset
manager for Kotak Mahindra Mutual Fund (KMMF). KMMF manages funds in excess of Rs.
11,000 cores and offers schemes catering to investors with varying risk- return profiles. It was
the first fund house in the country to launch a dedicated gilt scheme investing only in
government securities.

(5) KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE LIMITED : Kotak

Mahindra Old Mutual Life Insurance Limited is a joint venture between Kotak Mahindra Bank
Ltd. and Old Mutual plc. Kotak Life Insurance helps customers to take important financial
decisions at every stage in life by offering them a wide range of innovative life insurance
products, to make them financially independent. The company covers over 3 million lives & is
one of the fastest growing insurance companies in India

(6)KOTAK PRIVATE EQUITY GROUP (KPEG): Kotak Private Equity Group helps
nurture emerging businesses and mid-size enterprises to evolve into tomorrow's industry
leaders. With a proven track record of helping build companies, KPEG also offers expertise with
a combination of equity capital, strategic support and value added services. What differentiates
KPEG is not merely funding companies, but also having a close involvement in their growth as
board members, advisors, strategists and fund-raisers.

(6) KOTAK REALTY FUND: Kotak Realty Fund deals with equity investments covering
sectors such as hotels, IT parks, residential townships, shopping centres, industrial real estate,
health care, retail, education and property management. The investment focus here is on
development projects and enterprise level investments, both in real estate intensive
businesses. Thus, kotak mahindra company is not restricted to one business only.

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3.5 MISSION OF THE COMPANY:

To provide error free quality service to all the customers with speed and smile by deploying
best and innovative practices, enthusiastic talents, state of art technologies and thus create
center of excellence in operations management. Our team pushes the limits so our clients can
benefit. Always looking forward, we are committed to fostering and developing successful
business relationships. With a commitment to excellence and paying sharp attention to the
quality of work and services, perfectionalism is our only acceptable standard. Thus company’s
main focus is on the customer satisfaction because as we all know customer is the king of the
market. So that’s why company value their customers and their different types of needs are
studied and efforts are made to cater to their needs and to satisfy them also happily. A
company is always interested that its customer enjoys while being with them

3.6 PROMISES:
To deliver the highest standard of service quality.

To advise you of our targeted turnaround time and adhere to the same.

To have transparency in all our transactions or dealings.

To have solution oriented mindset where customers are placed first.

To act courteously fairly and reasonably in all our dealing with you.

To accept and act upon customers feedback/complaint

3.6 VISION STATEMENT:

The Global Indian Financial Services Brand:

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Our customers will enjoy the benefits of dealing with a global Indian brand that best
understands their needs and delivers customized pragmatic solutions across multiple platforms.
We will be a world class Indian financial services group. Our technology best practices will be
benchmarked along international lines while our understanding of customers will be uniquely
Indian. We will be more than a respository of our customers saving. We, the group, will be a
single window to every financial services in a customer`s universe
The Most Trusted Financial Services Company:
A cultural of empowerment and a spirit of enterprises attracts bright minds with an
entrepreneurial streak to join us and stay with us. Working with a home grown professionally
managed company, which has partnerships with international leaders, gives our company a
perspective that is universal as well as unique.

The most trusted financial services company:

We will create an ethos of trust across all our constituents. Adhering to high standards of
compliance and co operate governance will be an integral part of building trust.

Value Creation:
Value creations than a size alone will be our business diver

3.7 AWARDS AND CERTIFICATES:

2012
The company got ICAI AWARD for excellence in financial reporting category-1 in banking sector
for the year ended 31st march, 2010.

ASAI MONEY:
1) Best local cash management bank 2010.

IDG INDIA:
1) Kotak won the CIO 100 the agile award 100’ award 2010.

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2011
1) Banking technology excellence awards, best bank award in IT AWARD in IT framework and
governance among other banks 2009

IR GLOBAL RANKING:
1) Best corporate governance policies –ranked among the top five companies in asia pacific
2009

FINANCE ASIA:
1) Best Private Bank in India, for Wealth Management business, 2009

KOTAK ROYAL SIGNATURE CREDIT CARD:

1) Was chosen "Product of the Year" in a survey conducted by Nielsen in 2009.

EUROMONEY:
1) Best Private Banking Services (overall), 2009

2010
1) Banking Technology Award for IT Governance and Value Delivery, 2008

IBA BANKING TECHNOLOGY AWARDS:

1) Best Customer Relationship Achievement - Winner 2008 & 2009 

EMERSON UPTIME CHAMPION AWARDS:

1) Technology Senate Emerson Uptime Championship Award in the BFSI category, 2008.

2010

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1) Awarded the 10th Best Employer in the recently Conducted Hewitt’s Best Employers in India
2007 Study.

2) Best Investment Bank in India by Finance Asia.

3) Emerged winner in 16 categories in the Euro money Private Banking Poll 2007, including the
Best local Private Bank.

2009
1) IT Team of the Year” award at the annual Banking Technology Awards 2006.

2) Kotak securities was ranked The Most Customer Responsive Company for 2006 (Category -
Financial Services) by Avaya Global connect.

3) Awarded the Best Domestic Investment Bank and the Best Equity House in The Asset Triple A
Country Awards.

4) Awarded Voice of Customers Award for the Best Passenger Vehicle Finance Company in India
in 2006 by Frost & Sullivan.

5) Best Investment Bank in India by Finance Asia

6) Adjudged the best Mutual Fund House in the NDTV Business Leadership Award 2006

2007
1) Ranked as the top mergers & acquisitions advisor in India in terms of the value of mergers &
acquisitions deals announced from January to December 2005.

2) Topped the India Advisory Partners In data League table in terms of the value of deals
announced for the calendar year 2005.

Thus, we can say that kotak Mahindra is a recognized name in the field of banking and of
course when we talk about the awards and certificates.

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BOARD OF DIRECTORS:

Name Designation
Mr. Prakash Apte Non-Executive - Independent Director-Chairperson
Mr. Uday Kotak Executive Director-CEO-MD
Jaimin Bhatt Group Chief Financial Officer
Mr. Dipak Gupta Executive Director
Mr. K V S Manian Executive Director
Mr. Gaurang Shah Executive Director
EEEEEEEE
Mr. CNon-Executive
Jayaram Non- Executive Director
Mr. S Mahendra Dev Non-Executive - Independent Director
Ms. Farida Khambata Non-Executive - Independent Director
Mr. Uday Khanna Non-Executive - Independent Director
Mr. Uday Shankar Non-Executive - Independent Director
Mr. Paul Parambi Chief Risk Officer
Ms. Bina Chandarana Joint President & Company Secretary

CHAPTER-4
DATA ANALYSIS AND INTERPRETATION

DATA ANALYIS

ANALYTICAL TOOLS OR METHODS OF FINANCIAL ANALYSIS:

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4.1 COMPARATIVE STATEMENT ANALYSIS: The comparative statements analysis

is also referred as horizontal analysis. These are statements of the financial position at
different periods of time on percentage form. The elements of financial position are shown in a
comparative form so as to give idea of financial position at 2 or more periods. These statements
enable an in-depth study of financial position operating results. There are two types of
comparative statement Analysis: -a) Comparative balance sheet and b) Comparative Income
Statement.

4.2 COMMON SIZE STATEMENTS ANALYSIS:

The common size statements analysis is also referred as vertical Analysis, it involves evaluating
financial statements in which the items of financial statements are converted into percentage
of common base It Help the analysts compare companies of different sizes in differentindustries
There are two types of common size statement Analysis: a) Common size balance sheet and b)
Common size income statement

4.3TREND ANALYSIS: Trend analysis helps the future forecasts of various items. For
calculation of trend Base year is assumed to be equal to 100 and on the basis the percentage
of item of each year calculated.
4.4 RATIO ANALYSIS: Ratio analysis is one of the techniques used to analyse the financial
statement. It is the process of establishing and interpreting various ratios (quantitative
relationship between figures and group of figures). Ratio analysis helps in analysing financial
statement and decision making.

4.5 LONG TERM SOLVENCY: Ratio analysis is equally for assessing the long term
financial ability of the Firm. The long term solvency is measured by the leverage or capital
structure and profitability ratio which shows the earning power and operating efficiency,
Solvency ratio shows relationship between total liability and total assets.

OTHER USES: There are so many other uses of ratio analysis. It is an essential part of the
budgetary control & costing. These are of immense imp in analysis & interpretation of financial
statements as they bring the strength or weakness of firm.

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2011-12 2012-13 2013-14 2014-15 2015-16

change change change change change change change change change in change
Particulars
in Rs. in % in Rs. in % in Rs. in % in Rs. in % Rs. in %
EQUITIES AND
LIABILITIES
Equity Share Capital 1.90 0.52 2.96 0.80 11.86 3.18 1.02 0.26 531.01 137.50
Reserves and
1936.00 18.28 2345.80 18.72 3814.40 25.64 3076.30 16.46 10676.30 49.05
surplus
Minority Interest 52.85 49.30 48.66 30.40 62.17 29.79 64.80 23.92 59.91 17.85
Employees
stock options
-2.09 -5.66 -33.07 -94.97 6.78 387.43 -5.54 -64.95 0.42 14.05
(grants)
outstanding
Deposits 9147.80 33.49 12928.40 35.46 7540.61 15.27 15913.70 27.95 63105.30 86.63
-
Borrowings 7121.40 32.26 6977.27 23.90 -19.81 2407.74 8.30 12314.90 39.20
7164.80
Policy Holders funds 866.33 10.64 1065.74 11.83 937.28 9.30 2778.05 25.22 1355.67 9.83
Other Liabilities and
-456.00 -9.04 133.72 2.92 1209.52 25.62 2103.05 35.47 4184.28 52.09
Provisions
TOTAL CAPITAL
18668.00 25.34 23485.00 25.43 6402.00 5.53 26339.00 21.55 92227.80 62.08
AND LIABILITIES

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ASSETS
Cash and Balances
with Reserve Bank -84.23 -3.98 190.13 9.36 739.75 33.31 984.61 33.26 2979.78 75.53
of India
Balances with
Banks Money at Call 665.80 75.71 752.29 48.69 1385.11 60.29 -724.27 -19.67 1716.18 58.01
and Short Notice
-
Investments 5609.40 21.53 9248.81 29.21 -5.17 8559.82 22.07 22923.00 48.41
2116.20
Advances 11902.00 28.86 13114.00 24.68 5434.87 8.20 16939.70 23.63 56160.60 63.36
Fixed Assets 14.87 2.48 4.61 0.75 644.19 103.92 120.88 9.56 376.05 27.15
Other Assets 560.71 20.06 175.41 5.23 314.24 8.90 458.40 11.92 8072.17 187.54
TOTAL ASSETS 18668.00 25.34 23485.00 25.43 6402.00 5.53 26339.00 21.55 92227.80 62.08

Company annual report:

COMPARATIVE STATEMENTS ANALYSIS:

Table No 1: Comparative analysis of balance sheet for the year

2011 to 2015

2018-
2016-17 2017-18 2019-20
19
change change change change change change change change
Particulars
in Rs. in % in Rs. in % in Rs. in % in Rs. in %
EQUITIES AND LIABILITIES
Equity share capital 3.26 0.36 32.37 3.52 1.56 0.16 2.14 0.22
Reserves and surplus 5126.9 15.8 11962.9 31.84 7292.11 14.72 8852.25 15.58
Minority Interest 78.83 19.93 -474.43 -100 0 0 0 0

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Employees stock options (grants)

-1.55 -45.45 0.3 16.13 -0.09 -4.17 0.79 38.16
outstanding
Deposits 19591 14.41 35695.8 22.95 33588.5 17.56 35575.95 15.82
Borrowings 5960.1 13.63 8914.06 17.94 7834.97 13.37 -862.22 -1.3
Policy Holders funds 3644.6 24.06 3632.46 19.33 4992.48 22.26 4091 14.92
Other Liabilities and Provisions 980.55 8.03 1769.49 13.41 3241.3 21.66 31850.36 174.92
TOTAL CAPITAL AND LIABILITIES 35384 14.69 61532.9 22.28 57450.8 17.01 48001.46 12.15
ASSETS
Cash and Balances with Reserve
587.33 8.48 1421.27 18.92 1977.42 22.13 -1397.68 -12.81
Bank of India
Balances with Banks Money at Call
13402 286.7 -2609.2 -14.43 4886.41 31.59 34213.07 168.09
and Short Notice
Investments -1812 -2.58 22515.1 32.89 12510.4 13.75 7709.89 7.45
Advances 22332 15.42 38872.4 23.26 37464.7 18.19 6416.97 2.64
Fixed Assets -2.4 -0.14 784.27 44.6 154.57 6.08 -836.5 -31.01
Other Assets 877.5 7.09 549.09 4.14 457.28 3.31 1081.97 7.59
TOTAL ASSETS 35384 14.69 61532.9 22.28 57450.8 17.01 48001.46 12.15

Table No 2: Comparative analysis of balance sheet for the year 2016 to

2020
Interpretation -
• The share capital of the bank shows an increasing % trend from the year 2011 to 2020
but there is fluctuation in the rate of increase in capital. In 2015-16 i.e. 137.5% the rate
of increase in capital is more than other years.
• There is fluctuation in all the years in the rate of increase in reserves and surplus also.
This shows that bank is efficiently utilizing its reserves and surplus.
• The deposits of bank shows increasing % trend in all the years and there is no decreasing
% in any year than it indicates that the bank has not repaid any of its deposits.
• The borrowings also Shows an increasing % trend in all the years except in the year
201314 and 2019-20 which shows decreasing % i.e. (19.81%) and (1.3%) which indicate

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bank has repaid a large Amount of borrowings in this year and thereby reducing the
dependence
2011-12 2012-13 2013-14 2014-15 2015-16

change in change change in change change in change change in change change in change
Particulars
Rs. in % Rs. in % Rs. in % Rs. in % Rs. in %
INCOME

Total interest earned 1,990.5 47.5 1,862.3 30.1 724.6 9.0 952.8 10.9 6,664.3 68.6

Others 1.3 127.9 -0.1 -5.5 12.8 573.2 -3.8 -25.1 353.6 3,132.1

TOTAL INCOME 2,187.3 44.0 2,045.6 28.6 963.7 10.5 1,581.5 15.6 7,248.1 61.7

EXPENDITURE

Interest Expended 1,575.6 75.3 1,169.1 31.9 210.3 4.3 449.1 8.9 3,987.7 72.6

Payments to and
Provisions for 118.5 15.1 172.8 19.1 97.0 9.0 294.5 25.1 1,350.3 92.1
Employees
Depreciation 18.5 18.8 15.8 13.5 32.7 24.6 27.8 16.8 94.4 48.9

Operating Expenses
(excludes Employee 144.5 21.5 186.4 22.8 203.2 20.3 389.8 32.3 772.1 48.4
Cost & Depreciation)
TOTAL OPERATING
281.5 18.1 374.9 20.4 332.9 15.1 712.1 28.0 2,216.8 68.1
EXPENSES
TOTAL PROVISIONS
63.3 12.5 225.9 39.6 278.7 35.0 56.9 5.3 819.8 72.5
AND CONTINGENCIES

TOTAL EXPENDITURE 1,920.4 46.3 1,769.9 29.1 821.9 10.5 1,218.0 14.1 7,024.3 71.1

NET PROFIT / LOSS

266.9 32.6 275.7 25.4 141.8 10.4 363.5 24.2 223.8 12.0
FOR THE YEAR

Comparative income statement of Kotak Mahindra Bank (in Rs. Cr.):

Table No 3: Comparative analysis of income statement for the year

2011 to 2015
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2016-17 2017-18 2018-19 2019-20

change change change change change change change
Particulars change in %
in Rs. in % in Rs. in % in Rs. in % in Rs.
INCOME
1,314.7
Total interest earned 8.02 2,049.57 11.58 4,194.71 21.24 2,986.40 12.47
5
Others 32.57 8.93 -65.22 -16.41 -14.49 -4.36 -25.88 -8.14
2,179.6
TOTAL INCOME 11.47 2,624.61 12.39 4,746.53 19.94 3,754.49 13.15
7
EXPENDITURE
Interest Expended 88.97 0.94 644.03 6.73 2,467.44 24.15 745.70 5.88
Payments to and
Provisions for -48.44 -1.72 181.70 6.56 233.38 7.91 694.02 21.80
Employees
Depreciation 3.28 1.14 12.03 4.14 64.23 21.22 -366.92 -100.00
Operating Expenses
(excludes Employee 192.13 8.12 613.50 23.97 791.47 24.95 1,009.04 25.45
Cost & Depreciation)
TOTAL OPERATING
146.98 2.69 807.22 14.37 1,089.08 16.95 1,336.14 17.78
EXPENSES
TOTAL PROVISIONS AND
622.00 31.88 500.56 19.45 408.98 13.31 590.80 16.96
CONTINGENCIES
TOTAL EXPENDITURE 857.95 5.07 1,951.81 10.99 3,965.50 20.11 2,672.64 11.29
NET PROFIT / LOSS FOR 1,321.7
63.25 672.80 19.72 781.03 19.12 1,081.85 22.24
THE YEAR 2

Table No 4: Comparative analysis of income statement for the year

2016 to 2020
Interpretation –
• This is the net profit also shows an increasing % trend for all the year 2011-12, 2012-13 ,
2013-14, 2014-15, 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20 i.e. 32.6%, 25.4%,
10.4%, 24.2% 12.0% , 63.25%, 19.72%, 19,12% and 22.23% respectively. This indicates

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that the total incomes are showing higher rate increasing % as compared to the rate of
increasing % of total expenditure.

2011 2012 2013 2014 2015

(in Rs. (in Rs. (in Rs. (in Rs. (in Rs.
Particulars (in %) (in %) (in %) (in %) (in %)
Cr.) Cr.) Cr.) Cr.) Cr.)
EQUITIES AND
LIABILITIES
Equity Share Capital 368.44 0.50 370.34 0.40 373.30 0.32 385.16 0.32 386.18 0.26
TOTAL RESERVES
AND SURPLUS 10594.51 14.38 12530.70 13.57 14876.49 12.84 18690.85 15.29 21767.14 14.65
Minority Interest 107.21 0.15 160.06 0.17 208.72 0.18 270.89 0.22 335.69 0.23
Employees stock
options (grants)
outstanding 36.91 0.05 34.82 0.04 1.75 0.00 8.53 0.01 2.99 0.00
Deposits 27312.98 37.07 36460.73 39.48 49389.14 42.64 56929.75 46.57 72843.46 49.03
Borrowings 22073.32 29.96 29194.69 31.61 36171.96 31.23 29007.14 23.73 31414.88 21.14
Policy Holders funds 8145.20 11.05 9011.53 9.76 10077.27 8.70 11014.55 9.01 13792.60 9.28
Other Liabilities and
Provisions 5042.56 6.84 4586.52 4.97 4720.24 4.07 5929.76 4.85 8032.81 5.41
TOTAL CAPITAL AND 115834.6 122236.6 148575.7
LIABILITIES 73681.13 100 92349.39 100 6 100 3 100 6 100
ASSETS

Cash and Balances with

Reserve Bank of
India 2114.86 2.87 2030.63 2.20 2220.76 1.92 2960.51 2.42 3945.12 2.66
Balances with Banks
Money at Call and
Short Notice 879.40 1.19 1545.20 1.67 2297.49 1.98 3682.60 3.01 2958.33 1.99
Investments 26048.99 35.35 31658.43 34.28 40907.24 35.32 38791.05 31.73 47350.87 31.87
Advances 41241.95 55.97 53143.61 57.55 66257.65 57.20 71692.52 58.65 88632.21 59.65
Fixed Assets 600.42 0.81 615.29 0.67 619.90 0.54 1264.09 1.03 1384.97 0.93
Other Assets 2795.51 3.79 3356.22 3.63 3531.63 3.05 3845.87 3.15 4304.27 2.90

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115834.6 122236.6 148575.7

TOTAL ASSETS
73681.13 100 92349.39 100 6 100 3 100 6 100

COMMON SIZE STATEMENTS ANALYSIS:

Common size Balance sheet of Kotak Mahindra Bank (in Rs. Cr.)

Table No 5: Common size statement analysis of balance sheet for the

year 2011 to 2015.
2016 2017 2018 2019 2020

(in Rs. (in Rs. (in Rs. (in Rs. (in Rs.
Particulars (in %) (in %) (in %) (in %) (in %)
Cr.) Cr.) Cr.) Cr.) Cr.)
EQUITIES AND
LIABILITIES
Equity Share Capital 917.19 0.38 920.45 0.33 952.82 0.28 954.38 0.24 956.52 0.22
TOTAL RESERVES AND
SURPLUS 32443.45 13.47 37570.39 13.60 49533.24 14.67 56825.35 14.38 65677.60 14.82
Minority Interest 395.60 0.16 474.43 0.17 0.00 0.00 0.00 0.00 0.00 0.00
Employees
stock options
(grants)
outstanding 3.41 0.00 1.86 0.00 2.16 0.00 2.07 0.00 2.86 0.00
135948.7 155540.0 191235.8 224824.2 260400.2
Deposits
6 56.46 0 56.32 0 56.63 6 56.89 1 58.76
Borrowings 43729.79 18.16 49689.91 17.99 58603.97 17.35 66438.94 16.81 65576.72 14.80
Policy Holders funds 15148.27 6.29 18792.87 6.80 22425.33 6.64 27417.81 6.94 31508.81 7.11
Other Liabilities and
Provisions 12217.09 5.07 13197.64 4.78 14967.13 4.43 18208.43 4.61 50058.79 11.30
TOTAL CAPITAL AND 240803.5 276187.5 337720.4 395171.2 443172.7
LIABILITIES 8 100 6 100 7 100 5 100 1 100

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ASSETS

Cash and Balances with

Reserve Bank of India 6924.90 2.88 7512.23 2.72 8933.50 2.65 10910.92 2.76 9513.24 2.15
Balances with Banks
Money at Call and
Short Notice 4674.51 1.94 18076.32 6.54 15467.13 4.58 20353.54 5.15 54566.61 12.31
103487.0 111196.9
Investments
70273.90 29.18 68461.54 24.79 90976.60 26.94 2 26.19 1 25.09
144792.8 167124.9 205997.3 243461.9 249878.9
Advances
2 60.13 1 60.51 2 61.00 9 61.61 6 56.38
Fixed Assets 1761.02 0.73 1758.62 0.64 2542.89 0.75 2697.46 0.68 1860.96 0.42
Other Assets 12376.44 5.14 13253.94 4.80 13803.03 4.09 14260.31 3.61 15342.28 3.46
240803.5 276187.5 337720.4 395171.2 443172.7
TOTAL ASSETS
8 100 6 100 7 100 5 100 1 100

Table No 6: Common size statement analysis of balance sheet for the

year 2016 to 2020.
Interpretation -
▪ The reserves of Kotak Mahindra bank Is increasing in the year 2020 I.e. 14.8%
▪ This indicates that in past Years the Companies reserves are increasing that means that
the bank is earning more profits.
▪ The cash balance of bank for the year 2019 I.e. 2.7% but was decreasing in the year 2020
i.e. 2.1% This indicates that the cash balance of Kotak bank were increasing but in the
year 2020 there was decrease in cash balance so bank need to manage its cash properly.
▪ Kotak bank advances for the year 2019 I.e. 61.6% but was decreasing in the year 2020
i.e. 56.3%. This indicates that bank advance Were increasing but there was decrease in
the year 2020 so bank need to take necessary steps to increase its advances.

Common size income statement of kotak Mahindra Bank (in Rs. Cr.)
2011 2012 2013 2014 2015
Particulars (in Rs. Cr.) (in %) (in Rs. Cr.) (in %) (in Rs. Cr.) (in %) (in Rs. Cr.) (in %) (in Rs. Cr.) (in %)

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INCOME
Total interest
4189.8 100.0 6180.2 100.0 8042.5 100.0 8767.1 100.0 9719.9 100.0
earned
Other Income 780.5 18.6 977.4 15.8 1160.7 14.4 1399.7 16.0 2028.5 20.9
TOTAL INCOME 4970.3 118.6 7157.6 115.8 9203.2 114.4 10166.8 116.0 11748.3 120.9
EXPENDITURE
Interest
2092.2 49.9 3667.8 59.3 4836.8 60.1 5047.1 57.6 5496.1 56.5
Expended
TOTAL
OPERATING 1553.3 37.1 1834.8 29.7 2209.7 27.5 2542.6 29.0 3254.7 33.5
EXPENSES
TOTAL
PROVISIONS AND 506.6 12.1 570.0 9.2 795.9 9.9 1074.6 12.3 1131.5 11.6
CONTINGENCIES
TOTAL
4152.1 99.1 6072.5 98.3 7842.4 97.5 8664.3 98.8 9882.3 101.7
EXPENDITURE
NET PROFIT /
LOSS FOR THE 818.2 19.5 1085.1 17.6 1360.7 16.9 1502.5 17.1 1866.0 19.2
YEAR

Table No 7: Common size statement analysis of income statement for

the year 2011 to 2015.
2016 2017 2018 2019 2020

(in Rs.
Particulars (in %) (in Rs. Cr.) (in %) (in Rs. Cr.) (in %) (in Rs. Cr.) (in %) (in Rs. Cr.) (in %)
Cr.)
INCOME

Total interest earned 16384.2 100.0 17698.9 100.0 19748.5 100.0 23943.0 100.0 26929.6 100.0
Other Income 2612.2 15.9 3477.2 19.6 4052.2 20.5 4604.0 19.2 5372.1 19.9
TOTAL INCOME 18996.4 115.9 21176.1 119.6 23800.7 120.5 28547.2 119.2 32301.7 119.9
EXPENDITURE

Interest Expended 9483.8 57.9 9572.8 54.1 10216.8 51.7 12684.3 53.0 13430.0 49.9

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TOTAL OPERATING
5471.5 33.4 5618.5 31.7 6425.7 32.5 7514.8 31.4 8850.9 32.9
EXPENSES
TOTAL PROVISIONS
AND 1951.3 11.9 2573.3 14.5 3073.9 15.6 3482.9 14.5 4073.7 15.1
CONTINGENCIES
TOTAL
16906.6 103.2 17764.6 100.4 19716.4 99.8 23681.9 98.9 26354.5 97.9
EXPENDITURE
NET PROFIT / LOSS
2089.8 12.8 3411.5 19.3 4084.3 20.7 4865.3 20.3 5947.2 22.1
FOR THE YEAR

Table No 8: Common size statement analysis of income statement for

the year 2016 to 2020 Interpretation –
▪ Interest expended by Kotak Mahindra bank shows continuously decreasing from the
year 2016 to 2020 I.e. 57.9% to 49.9% this indicate that banks interest on deposits of its
customers and interest on loan taken are reducing.
▪ The Kotak bank operating expenses has increased in the year 2015 I.e. 32.9% than it
started to decrease continuously till 2019 but there was increase in 2020 i.e. 33.6% so
the bank need to decrease its operating expenses to earn more profits.

TREND ANALYSIS:

Year deposits advances net profit

2011 100 100 100
2012 133.492318 128.858141 132.61752
2013 180.826625 160.655958 166.31059
2014 208.434781 173.833972 183.64174
2015 266.699057 214.907903 228.06473
2016 497.744149 351.081411 255.41812
2017 569.472829 405.230378 416.96204
2018 700.164537 499.484918 499.19333
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2019 823.140719 590.326088 594.65277

2020 953.393625 605.885415 726.87917

Table No 9: Trend analysis for the year 2011 to 2020.

TREND ANALYSIS
deposits advances net profit

1200

1000

800

600

400

200

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Graph No 1: Diagrammatic representation of trend analysis for the

year 2011 to 2020.
Interpretation -
• Deposits of bank for the past ten years shows an increasing trend as in the beginning
from 20011 to 2015 there was not much increase but than from the year 2015 to 2020
there is continuous increasing trend in deposits
• Similarly advances shows an increasing from the year 2011 to 2020
• There is an increasing trend in the net profits of Kotak Mahindra Bank for the past ten
years I.e. from 2011 to 2020
The overall performance of the Kotak Mahindra Bank in past ten years.

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RATIO ANALYSIS:
Current Current Current ratio Book refereed – Financial Management –
Year assets liabilities M Y Khan. P K Jain

2011 8,098.29 5,042.56 1.605988 LIQUID RATIO - Liquidity refers to the

2012 10,566.01 4,586.52 2.30371 ability of a firm to meet its obligations in
2013 12,116.27 4,720.24 2.566876 the short run.
Current Ratio-Current Ratio establishes
2014 15,396.58 5,929.76 2.596493
the relationship between current Assets
2015 19,257.78 8,032.81 2.39739
2016 39,905.93 12,217.09 3.266402 𝐜𝐮𝐫𝐫𝐞𝐧𝐭 𝐚𝐬𝐬𝐞𝐭𝐬
𝐜𝐮𝐫𝐫𝐞𝐧𝐭 𝐫𝐚𝐭𝐢𝐨 =
2017 48,819.99 13,197.64 3.699145 𝐜𝐮𝐫𝐫𝐞𝐧𝐭 𝐥𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐞𝐬
2018 65,469.56 14,967.13 4.374223 and current Liabilities. It attempts to
2019 66,405.26 18,208.43 3.646951 measure the ability of a firm to meet its
current obligations. The ideal current ratio
2020 1,07,530.38 18,550.00 5.796786
is 2:1. It indicates that current assets
double the current liability is considered to be satisfactory. If current liabilities Exceeds current
assets, then the company may have problem in meeting its Short Terms obligations.

Table No 10: Current ratio for the year 2011 to 2020.

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Current Ratio
7
6
5
Axis Title

4
3
2
1
0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Current Ratio 1.605992.303712.566882.596492.39739 3.2664 3.699154.374223.646955.79679

Graph No 2: Diagrammatic representation of current ratio for the year

2011 to 2020.
Interpretation – The above graph indicates that current ratio in the year 2011, 2012,
2013, 2014 and 2015 I.e. 1.6, 2.3, 2.5, 2.5 and 2.3 respectively which were close to the ideal
ratio of 2:1 but in the year 2016, 2017, 2018, 2019 and 2020 i.e. 3.2, 3.6, 4.3, 3.6 and 5.7
respectively and which are above the ideal ratio so the bank need to properly use its current
assets or its short term financing facilities.

▪ Quick Ratio/ Acid/ Liquid test ratio -The Liquid ratio is used to measure a
firm's ability to pay its short-term obligations 'as and when they become due. Quick
Ratio establishes the relationship between the quick assets and current liabilities. The
ideal Quick Ratio of 1:1 is considered to be satisfactory. High Acid Test Ratio is an
indication that the firm has relatively better position to meet its current obligation in
time.
𝐋𝐢𝐪𝐮𝐢𝐝 𝐚𝐬𝐬𝐞𝐭𝐬
𝐐𝐮𝐢𝐜𝐤 𝐑𝐚𝐭𝐢𝐨 =
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐥𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬

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Current
Year Liquid asset liabilities Liquid ratio
2011 8071.34 5,042.56 1.600643
2012 10537.66 4,586.52 2.297528
2013 12080.12 4,720.24 2.559217
2014 15337.71 5,929.76 2.586565
2015 19203.99 8,032.81 2.390694
2016 39514.07 12,217.09 3.234327
2017 48776.3 13,197.64 3.695835
2018 65449.82 14,967.13 4.372904
2019 66380.39 18,208.43 3.645586
2020 107490.29 18,550.00 5.794625

Table No 11: Liquid ratio for the year 2011 to 2020.

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Liquid Ratio
7

5
Axis Title

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Liquid Ratio 1.60064 2.29753 2.55922 2.58657 2.39069 3.23433 3.69584 4.3729 3.64559 5.79462

Graph No 3: Diagrammatic representation of liquid ratio for the year

2011 to 2020.

Interpretation – A quick ratio of 1:1 is considered favourable because of every rupee of

current liability, there is at least one rupee of liquid asset. In the above graph liquid ratio for the
year 2011 was 1.6:1 it implies that the current assets of 1.6 of the bank can meet all current
claims, further it goes on increasing from the year 2012 to 2018 i.e. 2.29 to 4.3 respectively but
starts to decrease for the year 2019 i.e. 3.6 and again started to increase in the year 2020 i.e.
5.7. It indicates that the bank has sufficient liquid assets, it is considered satisfactory as bank
can easily meet its obligations in all the years from 2011 to 2020.
▪ Cash Ratio/ Absolute ratio:
Absolute Liquid Ratio is also called as Cash Position Ratio (or) Over Due
Liability Ratio. This ratio established the relationship between the absolute liquid assets and
current liabilities. The optimum value for this ratio should be one, i.e., 1: 2. It indicates that
50% worth absolute liquid assets are considered adequate to pay the 100% worth current

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liabilities in time. If the ratio is relatively lower than one, it represents that the company's
day-to-day cash management is poor.
𝐀𝐛𝐬𝐨𝐥𝐮𝐭𝐞
𝐥𝐢𝐪𝐮𝐢𝐝 𝐚𝐬𝐬𝐞𝐭𝐬
𝐀𝐛𝐬𝐨𝐥𝐮𝐭𝐞 𝐑𝐚𝐭𝐢𝐨 =

𝐜𝐮𝐫𝐫𝐞𝐧𝐭
𝐥𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬
Abs
olut
e Abs
liqui olut
d e
asse Current rati
Year ts liabilities o
2011 2,99 5042.56 0.5
4.26 937
98
2012 3,57 4586.52 0.7
5.83 796
39
2013 4,51 4720.24 0.9
8.25 572
08
2014 6,64 5929.76 1.1
3.11 203
2015 6,90 8032.81 0.8
3.45 594
07
2016 11,5 12217.0 0.9
99.4 9 494
1 41

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2017 25,5 13197.6 1.9

88.5 4 388
5 73
2018 24,4 14967.1 1.6
00.6 3 302
3 81
2019 31,2 18208.4 1.7
64.4 3 170
6 32
2020 64,0 18,550. 3.4
79.8 00 544
5 39

Table No 12: Absolute ratio for the year 2011 to 2020 .

Absolute Ratio
4

3.5
3

2.5
Axis Title

2
1.5
1
0.5
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Absolute Ratio 0.5938 0.77964 0.95721 1.1203 0.85941 0.94944 1.93887 1.63028 1.71703 3.45444

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Graph No 4: Diagrammatic representation of absolute ratio for the

year 2011 to 2020.

Interpretation – In the above graph absolute liquid ratio in the year 2011 was 0.59, there
after it shows increasing trend for the year 2012, 2013 and 2014 I.e. 0.77, 0.95 and 1.12
respectively and then it started to increase in the year 2016 and 2017 I.e. 0.94 and 1.93
respectively but in the year 2018 and 2019 it reduced to 1.7and in the year 2020 it again
increased to 3.4. This indicates that in past three years there is availability of liquid cash balance
in the bank which helps to pay off its Short term liabilities.

➢ LEVERAGE RATIO-Financial leverage refers to the use of debt finance.

▪ Debt Equity Ratio: This ratio shows the relationship between the borrowed capital
and owner’s capital. This ratio is calculated to ascertain the firm's obligations to
creditors in relation to funds invested by the owners. The ideal Debt Equity Ratio is 1: 1.
𝐋𝐨𝐧𝐠 𝐭𝐞𝐫𝐦 𝐝𝐞𝐛𝐭
𝐃𝐞𝐛𝐭 𝐄𝐪𝐮𝐢𝐭𝐲 𝐑𝐚𝐭𝐢𝐨 =
𝐒𝐡𝐚𝐫𝐞𝐡𝐨𝐥𝐝𝐞𝐫𝐬 𝐞𝐪𝐮𝐢𝐭𝐲

Debt
Shareholder equity
Year Total debt s’ equity ratio

2011 49,386.30 368.44 134.0416

2012 65,655.42 370.34 177.2842
2013 85,561.10 373.3 229.202
2014 85,936.89 385.16 223.12
1,04,258.3
386.18
2015 4 269.9734

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 The oxford college of business management – August 2022 Bangalore, India

1,79,678.5
917.19
2016 5 195.9011
2,05,229.9
920.45
2017 1 222.9669
2,49,839.7
952.82
2018 7 262.2109
2,91,263.2
2019 0 1454.38 200.2662
3,25,976.9
2020 3 1956.52 166.6106
Table No 13: Debt equity ratio for the year 2011 to 2020.

Debt Equity Ratio

300

250

200
Axis Title

150

100

50

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Debt Equity Ratio 134.042177.284229.202 223.12 269.973195.901222.967262.211200.266166.611

Graph No 5: Diagrammatic representation of debt equity ratio for the

year 2011 to 2020. ▪ Interpretation –In the above graph debt equity ratio shows
increasing trend from the year 2011 to 2015 I.e. 134.0 to 269.97 but in the year 2016 it was
reduced to 195.9 but after that it again shows an increasing trend for the year 2017 and 2018

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 The oxford college of business management – August 2022 Bangalore, India

i.e. 222.9 and 262.2 respectively but in the year 2019 and 2020 it is showing a decreasing trend
i.e. 200.2 to 166.6

respectively. This indicates that the debt equity ratio for the past ten years Are always too high,
this shows that the bank is more relying on outside funds as compared to the internal source of
capital in its capital structure.

➢ Proprietary Ratio: Proprietary Ratio is also known as Capital Ratio or Net Worth to
Total Asset Ratio. This ratio shows the relationship between shareholders' fund and total
assets.

𝐒𝐡𝐚𝐫𝐞𝐡𝐨𝐥𝐝
𝐞𝐫𝐬 𝐟𝐮𝐧𝐝
𝐏𝐫𝐨𝐩𝐫𝐢𝐞𝐭𝐚𝐫𝐲 𝐑𝐚𝐭𝐢𝐨 =

𝐓𝐨𝐭𝐚𝐥
𝐚𝐬𝐬𝐭𝐬
Shar Tot Pro
ehol al pri
ders ass eta
fund ets ry
rati
o
73
,6
368.
81 0.
44
.1 00
3 5
370. 92 0.
34 ,3 00
49 40
.3 1
9

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The oxford college of business management – August 2022 Bangalore, India

1,
15
373. ,8 0.
3 34 00
.6 32
6 23
1,
22
385. ,2 0.
16 36 00
.6 31
3 51
1,
48
386. ,5 0.
18 75 00
.7 25
6 99
2,
40
917. ,8 0.
19 03 00
.5 38
8 09
2,
76
920. ,1 0.
45 87 00
.5 33
6 33
952. 3, 0.
82 37 00

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 The oxford college of business management – August 2022 Bangalore, India

,7
20
.4 28
7 21
3,
95
,1 0.
71 00
145 .2 36
4.38 5 8
4,
43
,1 0.
72 00
195 .7 44
6.52 1 15
Table No 14: Proprietary ratio for the year 2011 to 2020.

Proprietary Ratio
0.006

0.005

0.004
Axis Title

0.003

0.002

0.001

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Proprietary Ratio 0.005 0.004010.003220.00315 0.0026 0.003810.003330.002820.003680.00441

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 The oxford college of business management – August 2022 Bangalore, India

Graph No 6: Diagrammatic representation of proprietary ratio for the

year 2011 to 2020.

Interpretation – In the above graph the proprietary ratio for the year 2011 was 0.5% but
started to decrease from the years 2012 to 2015 I.e. 0.40% to 0.26% respectively and then in
the year 2016 there was an increase in the proprietary ratio up to 0.38% but started to
decrease from the years 2017 to 2018 i.e. 0.33% to 0.28% respectively but again in 2019 and
2020 it started to increase i.e. 0.36% and 0.44% respectively. Hence it leads to conclusion that
owners have more stake in the total assets of the bank. As Owners stake in total assets is
increasing in the recent years it is good sign as far the Long terms solvency is concerned.

➢ TURNOVER/ACTIVITYRATIO: Turnover ratio is concerned with measuring the

efficiency in asset management. The proper balance between sales and assets generally
reflects that Assets are managed well.
▪ Fixed Assets Turnover Ratio: Fixed Asset Turnover Ratio indicates the extent to which
the investment in fixed assets contributes towards sales. Higher the ratio highlights a firm has
successfully utilized the fixed assets. If the ratio is depressed, it indicates the underutilization of
fixed assets.

𝐜𝐨𝐬𝐭 𝐨𝐟 𝐠𝐨𝐨𝐝𝐬 𝐬𝐨𝐥𝐝

𝐅𝐢𝐱𝐞𝐝 𝐀𝐬𝐬𝐞𝐭 𝐓𝐮𝐫𝐧𝐨𝐯𝐞𝐫 𝐑𝐚𝐭𝐢𝐨 =

𝐀𝐯𝐞𝐫𝐚𝐠𝐞 𝐟𝐢𝐱𝐞𝐝 𝐚𝐬𝐬𝐞𝐭𝐬

Fixed
Y Cost Averag
e e Turnov
a Good Fixed er
r s Sold Assets Ratio
2 1,553 605.41 2.5657
0 .32 5 11

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 The oxford college of business management – August 2022 Bangalore, India

1
1

2 1,834 607.85 3.0185

0 .83 5 32
1
2

2 2,209 617.59 3.5779

0 .73 5 6
1
3

2 2,542 941.99 2.6991

0 .61 5 76
1
4

2 3,254 1324.5 2.4572

0 .73 3 72
1
5

2 5,471 1572.9 3.4784

0 .52 95 09
1
6

2 5,618 1759.8 3.1926

0 .50 2 56
1
7

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 The oxford college of business management – August 2022 Bangalore, India

2 6,425 2150.7 2.9876

0 .72 55 58
1
8

2 7,514 2620.1 2.8680

0 .80 75 53
1
9

2 8,850 2279.2 3.8833

0 .94 1 37
2
0

Table No 15: Fixed asset turnover ratio for the year 2011 to 2020.

Fixed Asset Turnover Ratio

4.5
4
3.5
3
Axis Title

2.5
2
1.5
1
0.5
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Fixed Asset Turnover Ratio 2.565713.018533.577962.699182.457273.478413.192662.987662.868053.88334

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Graph No 7: Diagrammatic representation of fixed asset turnover ratio

for the year 2011 to 2020.
Interpretation –In the above graph fixed assets turnover ratio shows increasing trend from
2011 ,2012 and 2013 i.e. 2.56, 3.01 and 3.57 respectively but started to show decreasing trend
for 2014 and 2015 and then in the year 2016 it increased to 3.47 but again started to decrease
from 2017 to 2019 i.e. 3.19 to 2.86 respectively and then in the year 2020 it increased up to
3.88, it is good sign to the bank because the fixed assets have been effectively used and
managed in the business for the year 2020.
▪ Current Asset Turnover Ratio: This is ratio to know the efficiency of utilization of
current assets this indicates the efficiency with firm uses its current assets to generate sales.
𝐂𝐨𝐬𝐭 𝐎𝐟 𝐆𝐨𝐨𝐝𝐬 𝐒𝐨𝐥𝐝
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐀𝐬𝐬𝐞𝐭 𝐓𝐮𝐫𝐧𝐨𝐯𝐞𝐫 𝐑𝐚𝐭𝐢𝐨 =

𝐀𝐯𝐞𝐫𝐚𝐠𝐞 𝐜𝐮𝐫𝐫𝐞𝐧𝐭
𝐚𝐬𝐬𝐞𝐭𝐬
C Av Curr
o era ent
s ge Asse
t Cur t
ren Turn
t over
O Ass Rati
f ets o

G
o
o
d
s

S
o
l
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1 58 0.26
, 73. 447
5 15 8
5
3
.
3
2

1 93 0.19
, 32. 661
8 15 4
3
4
.
8
3

2 11 0.19
, 34 484
2 1.1 2
0 4
9
.
7
3

2 13 0.18
, 75 483
5 6.4 1

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4 25
2
.
6
1

3 17 0.18
, 32 784
2 7.1
5 8
4
.
7
3

5 29 0.18
, 58 496
4 1.8 2
7 55
1
.
5
2

5 44 0.12
, 36 664
6 2.9 8
1 6
8
.
5
0

6 57 0.11
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 The oxford college of business management – August 2022 Bangalore, India

, 14 244
4 4.7 6
2 75
5
.
7
2

7 65 0.11
, 93 396
5 7.4 9
1 1
4
.
8
0

8 86 0.10
, 96 177
8 7.8 3
5 2
0
.
9
4

Table No 16: Current asset turnover ratio for the year 2011 to 2020 .

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 The oxford college of business management – August 2022 Bangalore, India

Current Asset Turnover Ratio

0.3

0.25

0.2
Axis Title

0.15

0.1

0.05

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Current Asset Turnover Ratio 0.264480.196610.194840.18480.18784
3 0.184960.126650.11240.11397
5 0.10177

Graph No 8: Diagrammatic representation of current asset turnover

ratio for the year 2011 to 2020.

▪ interpretation –In the above graph the current asset turnover ratio for the year 2011
shows a better position i.e. 0.26 Were current assets of banks were efficiently utilized and
managed but it started to decrease from 2012 to 2020 I.e. 0.19 to 0.10 respectively. Hence it
indicates that there is no proper utilization of current assets available in the business so it is not
good sign for the bank. So the bank need to increase its cost of goods sold to the proportion
current assets available.

▪ Capital turnover ratio: The objective of this ratio is to determine how efficiently the
capital employed is being used, profitability and effective management by computing how
many times capital employed is turn-over in a stated period.

𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐓𝐮𝐫𝐧𝐨𝐯𝐞𝐫 𝐑𝐚𝐭𝐢𝐨 = 𝐀𝐯𝐞𝐫𝐚𝐠𝐞

𝐂𝐨𝐬𝐭 𝐜𝐚𝐩𝐢𝐭𝐚𝐥𝐨𝐟
𝐠𝐨𝐨𝐝𝐬 𝐞𝐦𝐩𝐥𝐨𝐲𝐞𝐝 𝐬𝐨𝐥𝐝

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 The oxford college of business management – August 2022 Bangalore, India

Cost Average Capital

Goods Capital Turnover
Year Sold Employed Ratio

2011 1,553.3 9,436.95 0.1646

2

2012 1,834.8 11,932.00 0.153774

3

2013 2,209.7 14,075.42 0.156992

3

2014 2,542.6 17,162.90 0.148146

1

2015 3,254.7 20,614.67 0.157884

3

2016 5,471.5 27,756.98 0.197122

2

2017 5,618.5 35,925.74 0.156392

0

2018 6,425.7 44,488.45 0.144436

2

2019 7,514.8 54,382.90 0.138183

0

2020 8,850.9 62,956.93 0.140587

4

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 The oxford college of business management – August 2022 Bangalore, India

Table No 17: Capital turnover ratio for the year 2011 to 2020.

Capital Turnover Ratio

0.25

0.2

0.15
Axis Title

0.1

0.05

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Capital Turnover Ratio 0.1646 0.153770.156990.148150.157880.197120.156390.144440.138180.14059

Graph No 9: Diagrammatic representation of capital turnover ratio for

the year 2011 to 2020.

▪ Interpretation – In the above graph the capital turnover ratio for the year 2011 to 2015
that was not much fluctuations I.e. around0.16 to 0.15. In the year 2016 there was an
increasing in capital turnover ratio I.e. 0.19 but again from the year 2017 to 2020 there was
decreasing trend i.e. 0.15 to 0.14 respectively. This indicates that there is not much efficient
utilization of capital employed in the business in the past years. This is because the cost of
goods sold are increasing in the proportion of capital employed in the bank.

▪ Working Capital Turnover Ratio: This ratio is used if a firm may also like to relate net
current assets (or net working capital gap) to sales. It may thus Computed by dividing sales by
net working capital.
𝐍𝐞𝐭 𝐬𝐚𝐥𝐞𝐬
𝐖𝐨𝐫𝐤𝐢𝐧𝐠 𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐓𝐮𝐫𝐧𝐨𝐯𝐞𝐫 𝐑𝐚𝐭𝐢𝐨 =
𝐍𝐞𝐭 𝐰𝐨𝐫𝐤𝐢𝐧𝐠 𝐜𝐚𝐩𝐢𝐭𝐚𝐥

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 The oxford college of business management – August 2022 Bangalore, India

Working
Total Net Working Capital
Year Income Capital Turnover Ratio
2011 4,970.29 3,055.73 1.6265475
2012 7,157.58 5,979.49 1.19702182
2013 9,203.15 7,396.03 1.24433649
2014 10,166.83 9,466.82 1.07394352
2015 11,748.32 11,224.97 1.04662373
2016 18,996.42 27,688.84 0.68606774
2017 21,176.09 35,622.35 0.59446078
2018 23,800.70 50,502.43 0.47127831
2019 28,547.23 48,196.83 0.59230514
2020 32,301.72 57,471.59 0.56204674

Table No 18: Working capital turnover ratio for the year 2011 to 2020 .

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 The oxford college of business management – August 2022 Bangalore, India

Working Capital Turnover Ratio

1.8
1.6
1.4
1.2
Axis Title

1
0.8
0.6
0.4
0.2
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Working Capital Turnover Ratio1.62655
1.19701.24431.07394
2 4 1.04662
0.68600.59446
7 0.47128
0.59231
0.56205

Graph No 10: Diagrammatic representation of working capital

turnover ratio for the year 2011 to 2020.
Interpretation: –In the above graph the working capital turnover ratio shows a continuous
decreasing trend, as in the year 2011 it has 1.62 but it was decrease up to 1.19 in the year 2012,
than it was slightly increased to 1.24 in the year 2013 and There after it started to decrease
further from the years 2014 to 2018 i.e. 1.07 to 0.47 respectively and then it started to increase
slightly in the year 2019 and 2020 i.e. 0.59 and 0.56 respectively. It indicates that the bank is
not efficiently using working capital employed in the bank. Even though the working capital
employed is increasing year by year the working capital turnover ratio is decreasing this is due
to not increase in the income to the proportion of increase in working capital employed.

➢ PROFITABILITYRATIO: Profitability reflects the final result of business operations.

Profitability ratios are calculated to measure overall performance and operating
efficiency of the company.
▪ Gross Profit Ratio: Gross Profit Ratio established the relationship between gross
profit and net sales. Higher Gross Profit Ratio is an indication that the firm has higher
profitability.

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 The oxford college of business management – August 2022 Bangalore, India

𝐆𝐫𝐨𝐬𝐬 𝐩𝐫𝐨𝐟𝐢𝐭
𝐆𝐫𝐨𝐬𝐬 𝐏𝐫𝐨𝐟𝐢𝐭 𝐑𝐚𝐭𝐢𝐨 = × 𝟏𝟎𝟎
𝐍𝐞𝐭 𝐬𝐚𝐥𝐞𝐬
Gross Total Gross Profit
Year Profit Income Ratio
2011 916.45 4,970.29 18.43856
2012 1,201.81 7,157.58 16.79073
2013 1,493.25 9,203.15 16.22542
2014 1,667.70 10,166.83 16.40334
2015 2,058.98 11,748.32 17.52574
2016 2,377.16 18,996.42 12.51373
2017 3,702.16 21,176.09 17.48274
2018 4,386.99 23,800.70 18.43219
2019 5,232.25 28,547.23 18.3284
2020 5,947.18 32,301.72 18.41134

Table No 19: Gross profit ratio for the year 2011 to 2020.

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 The oxford college of business management – August 2022 Bangalore, India

Gross Profit Ratio

20
18
16
14
12
Axis Title

10
8
6
4
2
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Gross Profit Ratio 18.438616.790716.225416.403317.525712.513717.482718.432218.328418.4113

Graph No 11: Diagrammatic representation of gross profit ratio for the

year 2011 to 2020.

▪ Interpretation – In the above graph the gross profit ratio is decreasing from the
year 2011 to 2014 i.e. 18.43% to 16.40% respectively, then there was slight increase in
the year 2015 i.e. 17.52% but there was decrease in the year 2016 i.e. 12.51% and then
there was an increase in gross profit ratio in the year 2017 i.e. 17.48%, there after there
was not much fluctuation in gross profit ratio for the year 2018, 2019 and 2020 i.e.
18.4%. This indicates that the bank is in good position as its gross profit for past four
years has maintained stability but further the bank has to increase its sales so that its
gross profit ratio increases.

▪ Net Profit Ratio -Net Profit Ratio is also termed as Sales Margin Ratio / Profit
Margin Ratio / Net Profit to Sales Ratio. This ratio reveals the firm's overall efficiency in
operating the business. Higher Net Profit Ratio indicates the standard performance of
the business concern.

𝐍𝐞𝐭 𝐏𝐫𝐨𝐟𝐢𝐭 𝐑𝐚𝐭𝐢𝐨 = 𝐍𝐞𝐭 𝐄𝐀𝐓

𝐬𝐚𝐥𝐞𝐬

× 𝟏𝟎𝟎

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 The oxford college of business management – August 2022 Bangalore, India

Net
Profit
Year Net Profit Total Income Ratio
2011 818.18 4,970.29 16.46141
2012 1,085.05 7,157.58 15.15945
2013 1,360.72 9,203.15 14.78537
2014 1,502.52 10,166.83 14.77865
2015 1,865.98 11,748.32 15.88295
2016 2,089.78 18,996.42 11.00091
2017 3,411.50 21,176.09 16.11015
2018 4,084.30 23,800.70 17.16042
2019 4,865.33 28,547.23 17.04309
2020 5,947.18 32,301.72 18.41134

Table No 20: Net profit ratio for the year 2011 to 2020.

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 The oxford college of business management – August 2022 Bangalore, India

Net Profit Ratio

20
18
16
14
12
Axis Title

10
8
6
4
2
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Net Profit Ratio 16.461415.159514.785414.7786 15.883 11.000916.110217.160417.043118.4113

Graph No 12: Diagrammatic representation of net profit ratio for the

year 2011 to 2020.

Interpretation –In the above graph the net profit ratio in the year 2011 was 16.46% and
thereafter there was no fluctuation in net profit ratio for the years 2012 to 2014 i.e. 14.77% and
then it increased in the year 2015 i.e. 15.88% but it decreased in the year 2016 i.e. 11.00% and
there after it started to show increasing trend from the year 2017 to 2020 i.e. 16.11% to 18.41%
respectively. This indicates a good sign for the bank as it is in better position and ensures
adequate return to the owners.
▪ Return on assets (ROA) -This ratio is calculated to measure the profit after tax
against the amount invested in total assets to ascertain whether assets are being utilized
properly or not. The return on assets shows at how much is the profit earned by the firm
per rupee of asset is used.
𝐍𝐞𝐭 𝐩𝐫𝐨𝐟𝐢𝐭 𝐚𝐟𝐭𝐞𝐫 𝐭𝐚𝐱𝐞𝐬
𝐑𝐞𝐭𝐮𝐫𝐧 𝐎𝐧 𝐀𝐬𝐬𝐞𝐭𝐬 = × 𝟏𝟎𝟎
𝐀𝐯𝐞𝐫𝐚𝐠𝐞 𝐭𝐨𝐭𝐚𝐥 𝐚𝐬𝐬𝐞𝐭𝐬

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 The oxford college of business management – August 2022 Bangalore, India

Net Average Return On

Year Profit Total Assets Assets
2011 818.18 64,414.63 1.270177

2012 1,085.05 83,015.26 1.307049

2013 1,360.72 1,04,092.02 1.307228

2014 1,502.52 1,19,035.64 1.262244

2015 1,865.98 1,35,406.19 1.378061

2016 2,089.78 1,94,689.67 1.07339

2017 3,411.50 2,58,495.57 1.319752

2018 4,084.30 3,06,954.01 1.33059

2019 4,865.33 3,66,445.86 1.327708

2020 5,947.18 4,19,171.98 1.418792

Table No 21: Return on asset for the year 2011 to 2020.

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 The oxford college of business management – August 2022 Bangalore, India

Return On Assets
1.6
1.4

1.2
1
Axis Title

0.8

0.6

0.4
0.2

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Return On Assets 1.270181.307051.307231.262241.378061.073391.319751.330591.327711.41879

Graph No 13: Diagrammatic representation of return on asset for the

year 2011 to 2020.

Interpretation: In the above graph the return on asset for the year 2011 the bank realized
Rs. 1.27 out of Rs. 100 Investment then from the year 2012 and 2013 there was no fluctuations
in return on asset ratio i.e. 1.30%, in the year 2014 it slightly decreased I.e. 1.26% and it
increased in the year 2015 i.e. 1.37% but in the year 2016 there was decrease up to 1.07% and
then from the year 2017 to 2020 there was again not much fluctuation in return on asset i.e.
1.31% to 1.41% respectively, hence it indicates there is no proper utilization of assets in the
bank.

▪ Return on Equity Capital (ROE)- The return on equity capital ratio indicates
what percentage of profits are enjoyed by equity Share holders.

𝐑𝐞𝐭𝐮𝐫𝐧 𝐎𝐧 𝐄𝐪𝐮𝐢𝐭𝐲 𝐂𝐚𝐩𝐢𝐭𝐚 = 𝐍𝐞𝐭

𝐩𝐫𝐨𝐟𝐢𝐭 𝐚𝐟𝐭𝐞𝐫 𝐭𝐚𝐱𝐞𝐬 − 𝐩𝐫𝐞𝐟𝐞𝐫𝐞𝐧𝐜𝐞 𝐝𝐢𝐯𝐢𝐝𝐞𝐧𝐝 × 𝟏𝟎𝟎
the business. 𝐀𝐯𝐞𝐫𝐚𝐠𝐞 𝐨𝐫𝐝𝐢𝐧𝐚𝐫𝐲 𝐬𝐡𝐚𝐫𝐞𝐡𝐨𝐥𝐝𝐞𝐫𝐬 𝐞𝐪𝐮𝐢𝐭𝐲

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Average Equity
Total Net Share Holders Return On Equity
Year Profit Fund Capital
2011 818.18 358.29 2.28356918

2012 1,085.05 369.39 2.93741033

2013 1,360.72 371.82 3.65962025

2014 1,502.52 379.23 3.96202832

2015 1,865.98 385.67 4.83828143

2016 2,089.78 651.685 3.20673331

2017 3,411.50 918.82 3.71291439

2018 4,084.30 936.635 4.36061006

2019 4,865.33 1203.6 4.04231472

2020 5,947.18 1705.45 3.48716175

Table No 22: Return on equity capital for the year 2011 to 2020.

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Return On Equity Capital

6

4
Axis Title

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Return On Equity Capital 2.283572.937413.659623.962034.838283.206733.712914.360614.042313.48716

Graph No 14: Diagrammatic representation of return on equity capital

for the year 2011 to 2020.
Interpretation –In the above graph the return on equity capital ratio shows an increasing
trend from the year 2011 to 2015 I.e. 2.2 to 4.8 but during the year 2016 there was a sudden
fall in return on equity ratio i.e. 3.2 and then it shown an increasing trend thereafter for the
year 2017 and 2018 i.e. 3.7 and 4.3 respectively but it started to fall in 2019 and 2020 i.e. 4.0
and 3.4 respectively. Hence it Indicates that there is no effective utilization of equity capital
employed which does not provide exclusive return on the owner’s funds.

▪ Earnings per Share: Earnings per share (EPS) is the portion of a company's profit
allocated to each outstanding share of common stock. Earnings per share acts as
indicator of a company's profitability. It helps in determining the market price of equity
shares of the company and in estimating the company’s capacity to pay dividend to its
equity
Share holders
𝐍𝐞𝐭 𝐩𝐫𝐨𝐟𝐢𝐭 𝐚𝐯𝐚𝐢𝐥𝐚𝐛𝐥𝐞 𝐭𝐨
𝐞𝐪𝐮𝐢𝐭𝐲 𝐡𝐨𝐥𝐝𝐞𝐫𝐬
𝐄𝐏𝐒 =

𝐍𝐮𝐦𝐛𝐞𝐫 𝐨𝐟 𝐨𝐫𝐝𝐢𝐧𝐚𝐫𝐲

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𝐬𝐡𝐚𝐫𝐞 𝐨𝐮𝐭𝐬𝐭𝐚𝐧𝐝𝐢𝐧𝐠

Yea Total Ne No Of Equity

r Profit t Shares EPS
201 818.18 334.72767 2.444315
1 4
1,085. 2.665298
201 05 0
2 407.10269 4
201 1,360. 139.75712 9.736319
3 72 7
1,502.52 3.2818717
2014 457.82410 9
1,865.98 6.9694102
2015 267.73858 4
2,089.78 3.7412360
2016 558.58010 4
3,411.50 3.3828375
2017 1,008.47289 9
4,084.30 10.615777
2018 384.73865 7
4,865.33 11.062085
2019 439.82033 3
5,947.18 5.6660250
2020 1,049.62119 9

Table No 23: Earnings per share for the year 2011 to 2020.

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Earnings per share

12

10

8
Axis Title

0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Earnings per share 2.44432 2.6653 9.736323.281876.969413.741243.3828410.615811.06215.66603

Graph No 15: Diagrammatic representation of earnings per share for

the year 2011 to 2020.

Interpretation: In the above graph the earnings per share was low in the year 2011 and
2012 I.e. 2.44 and 2.66 respectively, then there was drastic increase in earnings per share in the
year 2013 i.e. 9.73% but also there was sudden decline in the year 2014 i.e. 3.28% and then
there was drastic increase in the year 2018 and 2019 i.e. 10.61 and 11.06 respectively but again
there was decline in EPS in the year 2020 i.e. 5.66. This indicates that there was lot of
fluctuation of EPS.
From investor point of view the decrease in EPS is not good sign. Even though there is increase
in profits year by year EPS declined because along with increased profits there is an increase in
the number of shares of bank, so bank should increase its profits along with the number of
shares.

▪ Dividend Per Share (DPS) -It is expressed by dividing dividend paid to equity
shareholders by number of Equity shares outstanding. It is very helpful for potential
investors to know the dividend paying capacity of the company.

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𝐃𝐢𝐯𝐢𝐝𝐞𝐧𝐝 𝐩𝐚𝐢𝐝 𝐭𝐨 𝐨𝐫𝐝𝐢𝐧𝐚𝐫𝐲 𝐬𝐡𝐚𝐫𝐞 𝐡𝐨𝐥𝐝𝐞𝐫𝐬

𝐃𝐏𝐒 =
𝐍𝐮𝐦𝐛𝐞𝐫 𝐨𝐟 𝐨𝐫𝐝𝐢𝐧𝐚𝐫𝐲 𝐬𝐡𝐚𝐫𝐞𝐬 𝐨𝐮𝐭𝐬𝐭𝐚𝐧𝐝𝐢𝐧𝐠

Dividend Paid To
Equity Share Number Of Dividend Per
Year Holders Equity Shares Share
2011 36.88 334.72767 0.110179

2012 44.49 407.10269 0.109284

2013 52.38 139.75712 0.374793

2014 63.08 457.82410 0.137782

2015 82.07 267.73858 0.30653

2016 91.84 558.58010 0.164417

2017 0.07 1,008.47289 0.000069

2018 114.21 384.73865 0.296851

2019 160.28 439.82033 0.364422

2020 193.25 1,049.62119 0.184114

Table No 24: Dividend per share for the year 2011 to 2020.

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Dividend Per Share

0.4

0.35
0.3
0.25
Axis Title

0.2
0.15
0.1

0.05
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Dividend Per Share 0.110180.109280.374790.137780.306530.164426.9E-050.296850.364420.18411

Graph No 16: Diagrammatic representation of dividend per share for

the year 2011 to 2020.
Interpretation: In the above graph the dividend per share ratio started to decrease from
2011and 2012 I.e. 0.11% and 0.10% respectively and then started to increase for the year 2013
i.e. 0.37% but suddenly decreased in the year 2014 i.e. 0.13% and then increased in the year
2015 i.e. 0.30% but it started to decrease in the year 2016 i.e. 0.16%, further it drastically
reduced to zero in the year2017 which indicates that company did not distributed profits to
shareholders instead it retained for future expansion and then in the year 2018 bank
distributed 0.29 per share to shareholders, than it was further increased in the year 2019 i.e.
0.36% but in the year 2020 it was reduced i.e. 0.18%. This indicates that dividend paid to
shareholders is reducing.

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CHAPTER-5
SUMMERY OF FINDINGS AND RECOMMENDATION

5.1. SUGGESTIONS:
1) Kotak Mahindra Bank should concentrate more on marketing and corporate banking.

2) Kotak Mahindra Bank is a new enterprise, it should concentrate on gaining customer’s loyalty.

3) The owner’s funds as a percentage of total resources is 17.15% thus this ratio should be
increased. More and more owner’s funds should be employed.

4) The adjusted cash margin ratio is also to be improved.

5) he current liabilities to proprietor’s funds is 31.9 it should be decreased.

6) The capital gearing ratio states that the company is highly geared. A company is relying more
on the outsider resources.

These are the suggestions made by me

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5.2REFERENCES:
1) Dr.P.Ganapathi, M.Kulandaivelu and P.Keerthana “A STUDY ON FINANCIAL STATEMENT
ANALYSIS OF TAMILNADU NEWSPRINT AND PAPER LIMITED (TNPL) KARUR DISTRICT”. ISSN
(PRINT): 2393-8374, (ONLINE): 2394-0697, VOLUME-5, ISSUE-6, 2018.

2) S. Saigeetha and DR.S. T. Surulivel “A STUDY ON FINANCIAL PERFORMANCE USING RATIO

ANALYSIS OF BHEL, TRICHY” international journal of innovative research in management studies
(IJIRMS) volume 2, Issued 3, April 2017.pp. 31-39.

3) Dr. Donthi Ravinder and Muskula Anitha “Financial Analysis” IOSR Journal of Economics and
Finance (IOSR-JEF) e-ISSN: 2321-5933, p-ISSN: 2321-5925.Volume 2, Issue 3 (Nov. – Dec. 2013),
PP 10-22 www.iosrjournals.org.

4) R. Buvaneswari and S. Lakshmi “A STUDY ON FINANCIAL STATEMENT ANALYSIS OF SRIRAM

PERFUMES, TRICHY” international journal of advanced research in management and social
science (IJARMSS) Vol.4 July 2015.

5) M. Renu and DR. S. Sekar “A STUDY ON THE FINANCIAL PERFORMANCE OF STANDARD

CHARTERED FINANCE LIMITED” international journal of advanced research (2014), Volume 2,
Issue 6, 528-534, journal home page: http://www.journalijar.com.

6) Pratik P. Valand and K. K. Shstry “AN EMPIRICAL STUDY OF RATIO ANALYSIS” Indian journal of
applied research. Volume : 2, issue : 1, October 2012, ISSN-2249-555X.
Research methodology adopted for the study is descriptive in nature and is collected from
various sources like annual report of Kotak

7) Mahindra Bank available in www.bseindia.com, secondary data from Company

website(www.kotak.com), other websites (www.moneycontrol.com, Ibef.org and
www.google.com) and book sources .

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8) Book refereed – Financial Management – M Y Khan. P K Jain

CHAPTER-6

6.1 CONCLUSION:
On the basis of various techniques applied for the financial analysis I.e. comparative statement
analysis, common size statement, trend analysis and ratio analysis of Kotak Mahindra Bank it
can be concluded that the overall financial position and overall performance of the bank is
quiet healthy, as the incomes of the bank have increased over the period, but not in the same
pace as that of expenses. The bank has succeeded in maintaining a reasonable profitable
position.

Over the last ten years which has been covered in the study I.e. 2011 to 2020. As per liquid ratio
and cash ratio it came to know that the bank day to day cash management is good which helps
in repayment of current liabilities which in turn helps in current asset management so the
liquidity position of Kotak Mahindra Bank is good. As per gross profit ratio and net profit ratio it
came to know that sales are increasing but the bank need to ensures adequate return to the
owners by increasing return on equity capital ratio. So the banks overall profitability is in better
position. As per fixed asset turnover ratio, current asset turnover ratio and proprietary ratio it
came to know that efficiency and solvency position is better. The bank need to improve its
current asset management, efficiently utilize capital employed, increase its number of branches
in the state, check on unnecessary operating expenses by using automation, use channel
optimization and check staff productivity, to review the capital requirements and relative
capital costs and sell of ideal assets to improve profitability and financial position of the
business which might certainly help the bank to inculcate the same and reap profits and
continue the further growth and expansion of Kotak Mahindra Bank.

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BIBLOGRAPHY

Website:
www.google.com
www.kotaklife.com
www.insuranceworld.com
www.corpbank.com
www.about.com
www.kotak.com
www.tickertape.com
www.bseindia.com
www.moneycontrol.com

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