MAHARAJA RANJIT SINGH

PUNJAB TECHNICAL
UNIVERSITY BATHINDA

UNIVERSITY BUSINESS SCHOOL

SESSION: 2024-25
“FINANCIAL STATEMENT ANALYSIS”
OF
THE BANK OF BARODA LTD
A TRAINING REPORT SUBMITTED IN PARTIAL FULFILLMENT OF THE
REQUIREMENT FOR THE DEGREE OF
MASTERS OF BUSINESS ADMINISTRATION

SUBMITTED TO: DR. PRITPAL SINGH BHULLAR

 SUBMITTED BY: DIVYA SHARMA

DECLARATION

Project report submitted by us to University Business School, do hereby

declare that the Summer Training Project Report entitled “Financial Statement
Analysis of The Bank of Baroda Ltd.” Is the outcome of my own work and
submitted by me for the partial fulfillment of the requirement of the degree of
Master of Business Administration (MBA). The record is my own work and was
neither published nor submitted before for the award of any degree or any
Professional diploma to any other University or Institute.

Divya Sharma
 ACKNOWLEDGEMENT

I would like to express my deepest gratitude to everyone who has supported

and guided me throughout my internship journey.
First and foremost, I would like to thank ‘The Faridkot Central Co-op Bank Ltd’
for providing me with the opportunity to undertake this internship. It has been
an invaluable experience, contributing greatly to my professional and personal
growth.
I am profoundly greatful to Mr. Prince Attri (Manager) my internship supervisor
for her unwavering support, guidance and encouragement. Their insights and
expertise have been instrumental in making this internship a rich learning
experience.

I would also like to extend my sincere thanks to all the team members and
colleagues at The Bank of Baroda Ltd. Their cooperation, patience, and
willingness to share their knowledge have significantly enhanced my
understanding of the industry.

I am equally thankful to The Maharaja Ranjit Singh University Bathinda ,

particularly Dr. Pritpal Singh Bhullar (HOD of UBS Department), for their
continuous support and for providing me with this opportunity.

Lastly, I would like to thank my family and friends for their constant
encouragement and support throughout this period. Their belief in me has
been a source of motivation and strength.

Thank you all for making this internship an incredibly rewarding experience.

Sincerely,

Divya Sharma.
TABLE OF CONTENT

CHAPTER TITLE PAGE NO:

LIST OF TABLES

1 INTRODUCTION 7-12
2 REVIEW OF LITERATURE 13-15

3 OBJECTIVE OF STUDY 16-17

4 RESEARCH 18-20
METHODOLOGY

5 DATA ANALYSIS AND 21-27

INTREPRETATION

6 FINDINGS AND 28-30

SUGGESTIONS

7 CONCLUSION 31-32
9 BIBLIOGRAPHY 33-34
 List of tables
Sr. No Name Of Table Page No.
1 Current ratio 22
2 Proprietor ratio 23

3 Cash position ratio 24

4 Debt equity ratio 25

5 Return on equity 26
holder’s ratio

6 Solvency ratio 27
 CHAPTER 1
INTRODUCTION

RATIONALE OF THE STUDY:

Financial Statement Analysis refers to the process of determining financial
strength and weakness of the firm by properly establishing strategic
relationship between the items of the balance sheet and profit and loss
account. There are various methods and techniques used in analyzing financial
statements, such as comparative statements, trend analysis, common size
statements, schedule of changes in working capital, funds flow and cash flow
analysis, cost volume profit analysis and ratio analysis and other operative
data. This study helps to calculate the solvency and liquidity position of the
company order to find out the financial position of the organisation.

The analysis of financial statement represents three major steps:

The first step involves the re-organization of the whole financial data contained
the financial statements. Therefore the financial statements are broke down
into individual components and re-grouped into few principle elements in
keeping with their resemblances and affinities. Thus the record and profit and
loss accounts are completely re-casted and presented within the condensed
form entirely different from their original shape

The second step is that the establishment of serious relationships between the
individual components of record and profit and loss account this can be done
through the appliance tools of monetary analysis like Ratio analysis, analytic
thinking, Common size record and comparative record. Finally, the result
obtained by means of application of monetary tools is evaluated. Briefly
financial analysis is that the process of selection, relation and evaluation of
monetary statements. The tools of study are used for determining the
investment value of the business, credit rating and for testing efficiency of
operation.

Thus financial analysis helps to focus on the facts and relationships concerning
managerial performance, corporate efficiency, financial strength and weakness
and credit worthiness of the corporate.

Financial Statement Analysis:

The Analysis of Financial Statements is a study of relationships among various

financial values as set out in the financial statements, i.e., Balance Sheet,
Statement of Profit and Loss and Cash Flow Statement. The complex data given
in the financial statements is divided or broken into simple and valuable
elements and relationships are established between the interdependent or
related elements of the same statement or different financial statements. This
process of division, establishing relationships and interpretation there of to
understand the working and financial position of a business.

Goals:

Financial analyses often assess the following elements of a bank:

 Profitability-It’s an ability to earn income and sustain growth in both
short term and long-term. A company's degree of profitability is usually
based on the income statement, which reports on the company's results
of operation.
 Solvency-Its ability to pay its obligation to creditors and other third
parties in the long-term firm.
 Liquidity-Its ability to maintain positive cash flow, while satisfying
immediate obligation.
 Stability-The firm's ability to remain in business in the long run, without
having to sustain significant losses in the conduct of its business.
Assessing a company's stability requires the use of the income
statement and the balance sheet, as well as other financial and non-
financial indicators, etc.

Purpose of Study:

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

 To know the financial position

 Know the liquidity position
 Know the long term solvency
 Know the operating efficiency
 Know the overall profitability

Place of Study:

I. All the activities are carried out in The Faridkot Central Co-
operative Bank Ltd. Faridkot

Limitations:

 Financial analysis is based upon only monetary information and non-

Monetary factors are ignored.
 Financial statement could be wrong due to fraud.
  Financial statements have no predictive value

COMPANY BACKGROUND

‘The Bank of Baroda’ is registered under the Banking Resolution

Act,1949. The main objective of this Bank of Baroda is to provide
comprehensive and inclusive banking services to individuals, businesses,
and Government institutions, both in India and abroad. The banking
aims to promote economic development, support financial inclusion,
and offer innovative financial products and services that cater to the
diverse needs of customers.

Registration of the bank: The Bank of Baroda is a Government if India

undertaking , registered under the Banking Regulation Act 1949, and
functions as a public sector bank governed by the Reserve Bank of India.

Membership:

Banking services:

A. The Bank of Baroda Ltd. Provides many Banking Service:-

 Saving Accounts
 Current Accounts
 RTGS/NEFT
 Stamp Franking
 PAN Card Service
  Payment Of Taxes
 Demand Draft Facility

B. Insurance Services:-

 Life Insurance Services for Customer and Farmers

 Accident Insurance
 General Insurance
 Pardhan Mantri Jeevan Jyoti Bima Yojana

C. Banking Utilities:- The Faridkot Central Co-operative Bank Ltd.

provide advance utilities for more easy and convenience banking.

 ATM Services
 Cash Deposit
 Cheque Deposit Kiosk
 Lockers Facility
 SMS Alerts
 Cheque book

D. Deposit Schemes:- The Faridkot Central Co-operative Bank Ltd.

provides various kinds of deposit schemes for Customers.

 Fixed Deposits
 Junior Saving Account
 Advantage to Senior Citizens
 Recurring Deposits
 Pension scheme

E. Loan Facility:-

 Personal Loan.
 CD Loan.
 Education Loan.
 Urban Housing Loan.
 Rural Housing Loan.
 Loans Against Property.
 Two- Wheeler Farmers.
 Vehicle Loan.
 Vehicle Loan (Above 2 lacs)

Vision:-
  Bank provide short term and medium- term loans for agricultural
purposes and long- term loan for special schemes approved by NABARD
 Generally, to associate it-self with program of welfare for the village and
undertake such educative welfare work as may be possible
 To provide long term customer facilities such as long -term loans.
 Bank provides customers easy way of transaction such as net banking
and SMS banking

Mission:-

 Bank provides supply costly agricultural implements on hire.

 To raise funds by way of deposits from members and others.
 To arrange for the storage facilities of the produce raised by the
members.
 Technically qualified staff to meet challenges of high-technology
banking.

Who’s Who:- MEMBERS OF THE MANAGING COMMITTEE OF THE BANK OF

BARODA LIMITED, MANSA.
 CHAPTER 2
REVIEW OF LITERATURE

Literature Review: -
A literature review on financial statement analysis typically explores
various research studies, academic papers, and books related to the
topic. It includes discussions on different methods and techniques used
to evaluate the financial health of companies through their financial
statements.

Here are some additional points that are often covered in a literature
review on financial statement analysis:-

 Importance of Financial Statement Analysis: The review may discuss the

significance of analysing financial statements for various stakeholders,
such as investors, creditors, managers, and regulators.
 Financial Ratios: Researchers often explore different financial ratios, like
liquidity ratios, profitability ratios, and solvency ratios, and their
applications in assessing a company's performance and financial health.

 Trend Analysis: The literature review may delve into the importance of
trend analysis to identify patterns and changes in financial performance
over time.

 Comparative Analysis: It may discuss how comparing a company's

financial data with its peers or industry benchmarks can provide valuable
insights.

 Forecasting and Prediction: The review could touch on forecasting

techniques used in financial statement analysis to predict future
performance

 Limitations and Challenges: Researchers often acknowledge the

limitations and challenges of financial statement analysis, such as data
quality issues and the impact of accounting policies.

 Industry-Specific Studies: Some literature reviews focus on specific

industries to highlight nuances and unique considerations in financial
statement analysis.

 Use of Technology: The review may explore how advancements in

technology, such as artificial intelligence and machine learning, have
impacted financial statement analysis.
  Fraud Detection: It might cover studies related to using financial
statement analysis to detect potential financial fraud.

 Academic Models and Frameworks: Some reviews discuss established

models like DuPont analysis, Altman Z-score, and others used in financial
analysis

Chapter 3
Objective of study and importance
OBJECTIVE OF THE INTERNSHIP:
The primary objective of this internship was to gain practical experience in my
field (finance), bridging the gap between academic knowledge and real-world
application. The internship aimed to enhance my understanding of banking
system and finance, develop professional competencies, and contribute
meaningfully to the bank. Specifically goals included:

 Applying Academic Knowledge: Utilize theoretical knowledge acquired

through coursework in practical scenarios.
 Professional Exposure: Gain insight into the day-to-day operations,
culture, and challenges of a professional environment.
 Networking: Build professional relationships with colleagues, mentors,
and customers.

 Contribution: Undertook projects and tasks that add value to the

company while providing learning opportunities. Such as counselling .

Importance:
 To study financial position of the bank
 To study the various loans of the bank
 Analysis of financial statement of the bank
 To know about Liquidity and solvency position of The Bank of Baroda
Ltd.
 Chapter 4
Research methodology

Methodology:
The research involved extensive and intensive studies of The Faridkot Central
Co-operative Bank Ltd. Faridkot. In this project report a sincere effort has been
made to study the financial statements analysis of the bank. During this study, I
study the financial position and performance of the bank. At last, I have given
interpretation and conclusion of the study.

Source of Data collection: There are basically two types of data collection:
For present research work, secondary data has been used. The secondary data
has been collected from the official web site of the consulting company, annual
report &books.

There are mainly two types of data collection methods:

 Primary data
 Secondary data

Secondary data: -
Secondary sources of data are used for study. It is the data which is through
company profile and other websites. Researcher has to analyze the data and
interprets the results.

Tools and Techniques: -

The various tools and techniques followed in this research are as follows:

 Common size balance sheet.

 Comparative balance sheet.
 Trend analysis.
 Ratio analysis.
Chapter 5
 Data analysis and
interpretation

CURRENT RATIO: -
Current Ratio = Current Assets / Current Liabilities

Table Showing current ratio:

YEAR CURRENT CURRENT RATIO

ASSETS (LAKHS) LIABILITIES
(LAKHS)
2020-2021 59,130.31 22,149.25 2.66:1

2021-2022 65,065.88 27,050.83 2.40:1

2022-2023 59,857.66 20,378.54 2.93:1

INTERPRETATION: -
 The above figures show the current ratio for three years. This ratio is
used for Analysing the liquidity or short- term financial position of a firm.
The standard Ratio is 2: 1. The table shows current ratio is more than
standard ratio. In 2020-2021 the ratio is 2.66 which decreased to2.40 in
2021-2022. Later current Ratio increased.

FIGURE: -

PROPRIETOR RATIO: -
Proprietor Ratio = Shareholder fund / Total Assets

Table Showing Proprietor Ratio

YEAR SHAREHOLDER TOTAL ASSETS RATIO

FUND (LAKHS) (LAKHS)

2020-2021 5,439.83 59,733.10 0.091:1

2021-2022 5,528.98 65,672.67 0.084:1
2022-2023 5,563.24 60,451.85 0.092:1

INTERPRETATION: -
This figure shows proprietary ratio of 3 years. The standard ratio is
0.5:1. In2020-2021the ratio is 0.091 which is decreased to 0.084in 2021-
2022. Later proprietor ratio increased to 0.092 in 2022-2023.

FIGURE: -

CASH POSITION RATIO: -

Cash Position Ratio = Cash / Current liabilities

Table Showing Cash Position Ratio

YEAR CASH (LAKHS) CURRENT RATIO

LIABILITIES
(LAKHS)
2020-2021 209.81 22,149.25 0.009:1
2021-2022 16,495.38 27,050.83 0.609:1
2022-2023 14,393.88 20,378.54 0.704:1

INTERPRETATION: -
Above the chart show the Cash Position ratio of the last three years.
Ideal cash position ratios 1:1. In this ratio the cash and current liabilities
is increases. The Cash Position ratio in 2020-2021 is 0.009, in 2021-2022
is 0.609 and in 2022-2023 is 0.704.

FIGURE: -

DEBT EQUITY RATIO: -

Debt Equity Ratio = Fixed Deposit / Shareholder Fund

Table Showing Debt Equity Ratio

YEAR FIXED DEPOSIT SHAREHOLDER RATIO

(LAKHS) FUND (LAKHS)

2020-2021 32,144.02 5,439.83 5.909:1

2021-2022 33,092.86 5,528.98 5.985:1
2022-2023 34,510.07 5,563.24 6.203:1
INTERPRETATION: -

Above the chart show the Debt & Equity ratio of the last three years.
This ratio indicates the Relative proportions of debt & equity in financing
the assets of a bank. The debt & equity ratio in2020-2021 is 5.909, in
2021-2022 is 5.985 and increase in 2022-2023 is 6.20.

FIGURE: -

RETURN OF EQUITY-HOLDERS RATIO: -

Return of Equity Holders Ratio = Net Profit / Shareholder Fund

Table Showing Return of Equity Holders Ratio

YEAR NET PROFIT SHAREHOLDER RATIO

(LAKHS) FUND (LAKHS)

2020-2021 158.56 5,439.83 2.914:1

2021-2022 404.02 5,528.98 7.307:1
 2022-2023 213.84 5,563.24 3.843:1

INTERPRETATION: -

It is the final income that is available for distribution as dividends to

shareholders. The Return on Equity Holder ratio in 2020-2021 is 2.914,
increase in 2021-2022 is 7.307 and decrease in 2022-2023 is 3.843.

FIGURE: -

SOLVENCY RATIO: -
Solvency Ratio = Total Assets / Total Liabilities

Table Showing Solvency Ratio

YEAR TOTAL TOTAL RATIO

ASSETS(LAKHS) LIABILITIES
(LAKHS)
2020-2021 59,733.10 59,733.10 1
 2021-2022 65,672.67 65,672.67 1
2022-2023 60,451.85 60,451.85 1

INTERPRETATION: -

The above figure shows that the firm is financially sound. Total assets
and the Total liabilities are equal. More satisfactory on stable is the long-
term solvency Position.

FIGURE: -

Chapter 6
 Findings and suggestions

FINDINGS :-
1) The standard current ratio is 2:1. This ratio is used for analyzing the
liquidity or short- term financial position of a firm. In 2020-2021the
current ratio is 2.66 which is decreased to 2.40 in 2021-2022, later
increased. Thus ,the ratio is satisfactory.
2) The standard proprietor ratio is 0.5:1. In 2020-2021 the ratio is 0.091
which is slightly increased to 0.092 in 2022-2023. Thus, it shows a low
proprietary ratio means more dependence on borrowed funds and

3) The Cash Position ratios for all three years are significantly below the
greater risk for creditors.

ideal ratio of 1:1. This indicates that the company has been facing a

4) The ideal debt equity ratio is 2:1. The debt equity greater than 2:1, it
shortage of cash compared to its current liabilities over the years.

shows most of firm’s assets are financed through debt. The debt &
 equity ratio in 2020-2021 is 5.909, in 2021-2022 is 5.985 and increase

5) Bank has enough income that is available for distribution as

in 2022-2023 is 6.20.

dividends to shareholders. The Return on Equity Holder ratio in 2020-

2021 is 2.914, increase in 2021-2022 is 7.307 and decrease in 2022-
2023 is 3.843.
6) The total assets and the total liabilities are equal. Lower the ratio of
total Liabilities to total assets. More satisfactory on stable is the long-
term Solvency position of firm.

Suggestions: -
1) Analyse current ratio trends and industry benchmarks to assess
short-term liquidity health. Implement efficient working capital

2) Increase the proprietary ratio to reduce dependence on borrowed

management and monitor cash flow for better liquidity control.

funds and mitigate risk for creditors. A higher proprietary ratio

3) To improve the Cash Position ratio, focus on optimizing working

signifies a healthier financial structure.

capital and implementing cost reduction measures to free up cash

4) The firm should focus on reducing its debt burden and increasing
and enhance short-term liquidity.

equity financing to achieve a more balanced debt-equity ratio and

improve financial stability.
5) To improve long-term solvency, focus on reducing debt by increasing
equity and optimizing asset management.
 Chapter 7
conclusion

Bank is a very important and vital for economic development in mobilizing

capital and other resources. To keep pace with the current market and
demand, The Bank of Baroda Ltd., Is following several strategies and taking
new initiatives, offering new products and services to the customers. The bank
should maintain well-structured communication from upper level to lower
level. The Bank of Baroda Ltd. has a strong position in the competitive market.
Bank is holding very strong position in every financial aspect of the bank
whether related to loans and advances or deposits or any other. If bank will
improve automation and advanced technologies to established, it is advantage
for bank to Increase strength and higher position in the future by attracting
valuable customers. Bank financial position, liquidity and profitability also
increase. Working capital requirements, current assets, proprietary fund and
net profit continuously increase.

So, finally I concluded that bank’s financial position is good.

 Chapter 8
bibliography