A STUDY ON CAPITAL

BUDGETING OF GOLDEN
SKY FINANCE

PROJECT REPORT

Submitted by

TAMIZHSELVAN .M

Register No: 713221631112

In partial fulfillment for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

IN

RVS INSTITUTE OF MANAGEMENT STUDIES

COIMBATORE –641402

MAY 2023
RVS INSTITUTE OF MANAGEMENT STUDIES, COIMBATORE-641402

BONAFIDE CERTIFICATE

Certified that this project reported title as “A STUDY ON CAPITAL BUDGETING OF

GOLDEN SKY FINANCE” is the bonafide work of Mr. TAMIZHSELVAN .M who carried

out the research under my supervision. Certified further, that to the best of my knowledge the

work reported herein does not form part of any other project report or dissertation on the basis

of which a degree or award was conferred on an earlier occasion on this or any other candidate.

Ms. G. RAMYA KRISHNA, M.B.A., Dr. J. NIRUBARANI, M.B.A., Ph.D.,

Project Guide Head of Department

Submitted for the Project Viva-Voce examination held on

Internal Examiner External Examiner

 DECLARATION

I affirm that the project work titled “A STUDY ON CAPITAL BUDGETING OF

GOLDEN SKY FINANCE” being submitted in partial fulfillment for the award of Master

of Business Administration is the original work carried out by me. It has not formed the part

of any other project work submitted for award of any degree or diploma, either in this or any

other University.

TAMILSELVAN .M

713221631112

I certify that the declaration made above by the candidate is true.

Ms. G. Ramya Krishna, B.Com(CA)., MBA.,

 ACKNOWLEDGEMENT
“Gratitude is the music of our hearts.” A summer training of such a
comprehensive finish cannot be completed without the help of numerous sources and
people throughout the long rugged path of success. We realize this fact and so, we are
greatly indebted to all of them and take this opportunity

to thank them.
First and foremost let me sincerely thank almighty for the great opportunity and
blessings that he has showered up on me for the successful and timely completion of my
Project. I wish to pledge and reward my deep sense of gratitude for all those who have made
this project come alive.

I would like to express my heart-felt gratitude to thank to Dr. P.V. Prabha MBA.,
Ph.D., Director, RVS Institute of Management Studies for permitting and encourage me to
take up this project.

Now I gratefully thank to Dr. J. Nirubarani MBA., M.Phil., PhD., Head, RVS
Institute of Management Studies, for the active and patient support forwarded to me in
respect of this project.

I am gratefully indebted to my internal faculty guide Prof. Ms. Ramya Krishna .G

B.Com(CA)., MBA., Assistant Professor, RVS Institute of Management Studies, for
encouraging me and for her constant support throughout the course of the project and
helping me to completeit successfully.

I thank to all other faculties and non-teaching staffs of RVS Institute of Management
Studies for indirectly helping me to complete the report.

And also I would like to express sincere gratitude to my parents and all other family
members for their valuable and inseparable support in completion of this project. Once
again I take this opportunity to convey my sincere thanks to each and every person who
helped me directly and indirectly in the successful completion of this summer training.

TAMIZHSELVAN .M
 TABLE OF CONTENTS
CHAPTERS TITLE PAGE
NO
ABSTRACT I
LIST OF TABLE II
LIST OF CHART III
INRODUCTION
1.1 INTRODUCTION OF THE STUDY 01
1.2 INTRODUCTION OF THE COMPANY 02
I 1.3 ABOUT THE COMPAY PROFILE 03
1.4 OBJECTIVES OF THE STUDY 08
1.5 SCOPE OF THE STUDY 08
1.6 LIMITATIONS OF THE STUDY 09
II REVIEW OF LITERATURE 11
III RESEARCH METHODOLOGY 23
IV DATA ANALYSIS AND INTERPRETATION 32
FINDINGS, SUGGESTION AND CONCLUSION
5.1 FINDINGS 49
V 5.2 SUGGESTION 50
5.3 CONCLUSION 51
BIBLIOGRAPHY 52
APPENDIX 54
ABSTRACT

This study attempts to highlight the capital budgeting phenomena and capital budgeting
techniques on the cash flows of bank. Capital budgeting represents one of the main tools used by
banks to choose investments that will generate the highest rates of return. It assesses the potential
profitability of proposed investments. The banking industry has market, credit and operational
risks that are highly regulated. Any investment decision by banks must, therefore, take these and
other factors into consideration through the capital budgeting process. Banks and other
organizations have limited capital available at any time. Capital Budgeting aims to find the best
use of the available capital to maximize the return. The banking industry has numerous
investment opportunities because other types of organizations with capital budgeting assessments
come to banks for financing. Like any other enterprise, the bank has to assess the feasibility of
every proposal by analyzing the net present value, payback period of the proposed investment.
The major methods of capital budgeting include cash flow, payback, and net present value.
 LIST OF TABLES

Table No Particulars Page No

4.1 Table showing Net Present Value 32

4.2 Table showing Pay Back Period 35

4.3 Table showing Account Rate of Return 37

4.4 Table showing Cash Flow Statement 38

4.5 Table showing Return on Net Worth 42

4.6 Table showing Return on Capital and Employed 43

4.7 Table showing Return on Asset 44

4.8 Table showing Cash Earnings Retention Ration 45

4.9 Table showing Valuation of Ratio 46

4.10 Table showing Retention Ratio 47

 LIST OF FIGURES AND GRAPH

Graph No Particulars Page No

4.1 Graph showing Net Present Value 34

4.2 Graph showing Pay Back Period 36

4.3 Graph showing Accounting Rate of Return 37

4.4 Graph showing Net Cash Flow from Operating Activities 39

4.5 Graph showing Net cash used in Investing Activities 40

4.6 Graph showing Net used for Financing Activities 41

4.7 Graph showing Return on Net Worth and Equity 42

4.8 Graph showing Return on Capital and Employed 43

4.9 Graph showing Return on Assets 44

4.10 Graph showing Cash Earning Retention Ratio 45

4.11 Graph showing Valuation Ratio 46

4.12 Graph showing Retention Ratio 47

 CHAPTER – I

INTRODUCTION