A PROPOSAL ON ANALYSIS OF FINANCIAL

STATEMENT OF EVEREST BANK LIMITED

Submitted By:
Ambika Koirala
T.U. Regd. No.: 7-2-25-330-2018
Campus Roll No.= 335
Group: Finance

Submitted To:
Nepal Commerce Campus
Research Department
Tribhuvan University

In Partial fulfillment of the requirements for the degree of

BACHELOR OF BUSINESS STUDIES (BBS)

Kathmandu, Nepal
February, 2023
Table of content
1. Background of study
2. Profile of Everest Bank Limited
3. Statement of problem
4. Objective of study
5. Research methodology
6. Data presentation and analysis tool
7. Chapter plan
8. Limitation of the study
Bibliography
 Chapter 1
Introduction

1. Background of the study .

Financial Analysis has merged since the beginning of financial function as an

independent function and as other functions in the firm and has emerged
specifically in 1900 when field studies were conducted using the analysis in the
study of financial position of the enterprises. This function of Financial
Analysis was in the United States of America in 1900, when a study was
conducted on 981 companies through the use of seven financial ratios to study
the status of these companies.
The financial system in Nepal begins after the established of Nepal Bank
Limited (the first bank in Nepal).Discussing about its definition, financial
analysis primarily refers to an assessment of the viability, stability, and
profitability of a business, sub- business or project. It can be defined as the
conversion of financial data into useful information for decision
making .Therefore, virtually any use of financial statements or other financial
data for some purpose is financial analysis, and essentially, is the primary
focus of accounting and financial professionals.
Alicia Tuovila (2022) explains financial analysis as the process of evaluating
businesses, projects, budgets, and other finance-related transactions to
determine their performance and suitability. Typically, financial analysis is
used to analyze whether an entity is stable, solvent, liquid, or profitable enough
to warrant a monetary investment.
Financial analysis can help fund managers make future business decisions or
review historical trends or past successes if conducted internally. If conducted
externally, financial analysis can help investors choose the best possible
investment opportunities. Fundamental analysis and technical analysis are the
two main types of financial analysis. Fundamental analysis uses ratios and
financial statement to determine the intrinsic value of a security whereas
technical analysis assumes a security’s value is already determined by its price
and it focuses on trends in value over time.
Financial analysis includes both analysis and interpretation. The term analysis
means simplification of financial data by methodical classification given in the
financial statements. Interpretation means explaining the meaning and
significance of the data. These two are complimentary to each other. Analysis
is useless without interpretation, and interpretation without analysis is difficult
or even impossible.
Financial Analysis Dictionary defines financial analysis as the use of
statements and calculation of ratios to monitor and evaluate the financial
performance and position of a business. Financial analysis needs the use of
various types of financial information such as balance sheet, income statement,
sources and uses of fund statement and statement of cash flows. Financial
analysis can be undertaken by management of the firm, or by parties outside
the firm, for example owners, creditors.
In short, for financial analysis, it involves the use of various financial statement
such as balance sheet (summarizes the assets, liabilities and owner’s equity of a
business), the income statement (summarizes the revenue and expenses) of the
firm over a particular period. The balance sheet prepares the financial position
of a firm over a period of time. To evaluate the financial performance of a firm,
the analyst needs a certain parameters of the company by which the
quantitative relationship and its position come out. The most widely used
effective tool of the financial analysis is ratio analysis. Financial ratio helps us
to find symptoms of the operational and financial problems of a corporation,
which can be ascertained by examining the behaviour of the ratios.

2. Profile of the Everest Bank Limited

Everest Bank Limited (EBL) is one of the leading commercial banks of Nepal with
the mission of “Growth Through Banking For All”. It has been in operation in Nepal
since 1994 A.D. with the view and objective of extending professional and efficient
banking services to various segments of the society. Deriving strength from joint
venture partner, it has been established itself as one of the leading private banking
sector of the country.the bank has recorded commendable performance with
consistent growth in net worth and profit having one of the lowest non performing
assests in the industry.
The vision of bank is to be a Leading Commercial Bank with Pan Nepal presence and
become a household name, providing wide range of financial products and services
 and mission is Growth through Banking for All. The mottos of EBL are Consistent in
terms of Performance and Growth, Strong in terms of its Systems and Procedures;
and Dependable in terms of Return to all Stakeholders.
The bank has received different awards and achievements. The bank was conferred
with the “Best Managed Commercial Bank” by NEWBIZ BUSINESS.
Everest Bank Limited established with the slogan of “Consistent, Strong &
Dependable”, aims to be the household name gaining confidence of its shareholders,
investors, depositors and other interested parties. For this purpose, analysis of
financial performance is must. The analysis of financial performance manifest
various aspects such as stability, profitability, solvency and liquidity position of the
organization. Information regarding such aspects of financial statement not only
facilitates the users but also the bank itself to identify its strength and weakness. This
will help the bank to formulate plans and policies for better operation in future.
Therefore, this report will portray the analysis of financial statement of Everest Bank
Limited.

Analysts track performance measures across financial statements using several

different methods for financial performance analysis, including vertical, horizontal,
and ratio analysis. This research focuses on analysis of financial statement using
various tools of ratio analysis. Statistical and financial ratios such as liquidity ratios,
profitability ratios, leverage ratios, activity ratios as well as other relevant financial
ratios will be used as data analysis procedures. This study shall include the data from
FY 2073/74 to 2077/78.

3. Statement of Problem

It aims in identifying and explaining the problem. In present context of Nepal,

commercial banks have good performance. On the basis of profitability and
productivity of commercial banks, public have confidence in their performance.
However, various environmental factors, state of economy, structure of capital and
money market, government policies, taxation policies and various internal factors
 have influence upon financial performance and position of commercial banks. In
these circumstances, it is highly useful to make the study on financial statement of
Everest Bank Ltd.
Profitability position and stock prices are the general factors considered for evaluating
the financial performance of Everest Bank Ltd. However, one can raise a question,
“Are these the only factors to reflect the performance of the bank?”
In this context, the main purpose of the study is analyzing the financial performance
of the Everest Bank Limited in terms of turnover, profitability, liquidity and
efficiency in operation.
4. Significance of the study
Analysis of Financial Statement is a crucial part of financial decision making of
business enterprise. Poor financial management adversely affect on liquidity,
turnover and profitability. It is required to analyze the financial statement periodically
in order to ensure smooth functioning of enterprise. This study is made to gain
practical knowledge about the banking company and evaluate its financial position.
In fact, the financial performance is a mirror, which shows the weakness and strength
of organization. The paramount significant is not the establishment of organization
but how effective is their performance. This study is expected to be helpful to
researcher, scholar, students, policy makers and other interested parties and also to
give information about the financial condition of EBL to help to increase the
analytical power of investors, depositors, debtors, suppliers etc.

5. Objective Of the Study

Examination and evaluation of financial analysis of Everest Bank Ltd id the primary
objective of this study ,along with the followings :

a. To determine the financial performance of Everest Bank Ltd.

b. To identify probability position of the bank.
c. To examine the liquidity turnover efficiency of assets management.
d. To find out the leverage ratios of the bank in term of debt and capital.

6. Research Methodology
The research methodology is the process used to collect information and data. The
methodology may include interviews, survey, publication, research and other research
techniques.
 Sources of Data Collection

Data can be collected from primary sources and secondary sources. Primary data
are first hand data collected through direct involvement of researcher whereas
secondary data are second hand data which are already collected by someone else
and used by researcher for his/her study.
The major data used in this project report are collected through secondary
sources.

Secondary Data:
Secondary data are those data, that has previously been gathered and can be
accessed by researchers. Data in this project are collected from published as well
as unpublished sources.
Secondary data used in this project are listed below:
• Annual financial reports of Everest Bank Limited.
• Official website of Everest Bank Limited.
• News papers
• Books and articles

7. Data Presentation and Analysis Tool

The obtained data through research is presented, tabulated and graphed to analyze and
achieve the goal of the study. The financial ratios used for data analysis are:
• Profitability ratios
• Liquidity ratios
• Assets management ratio And other financial ratios Further, following tools
have been used for data presentation:

• Tabulation
• Bar diagrams
 • Pie-chart

8. Chapter Plan

i) Chapter one - Introduction:

It deals with the introductory part. It consists of background of study, banking
scenario in Nepal, profile of the organization, statement of the problem, objective of
the study, review of literature, methods of data collection, limitations of the study and
definition of terms.

ii) Chapter two – Result and Analysis:

Chapter two deals with data presentation and analysis of result and findings. It
exhibits systematic presentation of data collected and analysis of result and findings
of project work.

iii) Chapter three - Discussion and Conclusion:

Chapter three, last chapter of the study focuses on evaluating and interpreting the
results obtained. Further, it also deals with present implication of results obtained and
conclusion drawn useful for future studies.

9. Limitation of the study

Limitation tends to narrow the area of study. It is caused due various undeniable
circumstances.
The major limitations of this study are mentioned below:

• The Research is based on records of 5 fiscal years’ analysis only i.e. from FY
2073/74 to FY 2077/78
• The researcher has used only some statistical tools for presentation and
analysis of data.
• Most of the data used in this study are based on secondary sources mainly
official website of Everest Bank Limited.
 • The main focus is given to the quantitative aspect rather than qualitative
aspect.
• The study is based on Everest Bank Limited only.
 It is only for partial fulfillment of Bachelor of Business Studies (BBS).
Bibliography

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Practitioner's Guide. New Jersey: John Wiley and Sons, Inc.
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Distrubuters.
Dangol, R. M., & Dangol, J. (2062). Mnanagement Accounting. Taleju Prakashan.
Gerald I.White, A. C. (2002). The Analysis and Use of Financial Statements. John
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Website
www.everestbankltd.com
www.google.com
www.nrb.org.np