A STUDY ON INVESTMENT ANALYSIS OF

NEPAL MULTIPURPOSE COOPERATIVE LIMITED

A Project Work Report

By:
Name
T.U. Regd. No:
Symbol No.:-
College Name

Submitted to:
The Faculty of Management
Tribhuwan University

In Partial Fulfillment of the Requirements for the Degree of

BACHELOR OF BUSINESS STUDIES (BBS).

College Address
2024
 DECLARATION

I hereby declare that the project work entitled A STUDY ON INVESTMENT ANALYSIS OF
NEPAL MULTIPURPOSE COOPERATIVE LIMITED. submitted to the faculty of
Management, Tribhuvan University, Kathmandu is an original Project work under the
supervision of SUPERVISOR NAME, faculty of member, COLLEGE NAME, ADDRESS and
is submitted in partial fulfillment of the requirement for the degree of Bachelor of Business
Studies (BBS).

..............................
Signature
STUDENT'Spp NAME
Date:

ii
 SUPERVISOR’S RECOMMENDATION

The project work report entitled A STUDY ON INVESTMENT ANALYSIS OF NEPAL

MULTIPURPOSE COOPERATIVE LIMITED, submitted by STUDENT'S NAME of
COLLEGE NAME, COLLEGE ADDRESS is prepared under my supervision as per the
procedure and format requirement laid by the Faculty of Management, Tribhuvan University, as
partial fulfillment of the requirements for the degree of Bachelor of Business Studies (BBS). I,
therefore, recommend the project work for evaluation.

Signature:
STUDENT'S NAME
COLLEGE ADDRESS

Date:-

iii
 ENDORSEMENT

We hereby endorse the project work report entitled A STUDY ON INVESTMENT

ANALYSIS OF NEPAL MULTIPURPOSE COOPERATIVE LIMITED. submitted by
STUDENT NAME of COLLEGE NAME, ADDRESS, in partial fulfillment of the
requirements for award of the Bachelor of Business Studies (BBS) for external evaluation.

……………………… ………………………
Signature: Signature:
RESEARCH HEAD NAME PRINCIPAL NAME
Head, Research Committee Campus Chief
Date: College Name
Date:

iv
 ACKNOWLEDGEMENT

This Project work report is concerned with the field work report of A STUDY ON
INVESTMENT ANALYSIS OF NEPAL MULTIPURPOSE COOPERATIVE LIMITED. It is
the partial fulfillment for the degree of BBS 4th Years. It took quite a long period of time to
develop the concept of this project work. During this period I have suggestions and guidance of
all my beloved friends, family and teachers, who has helped a lot to improve the quality of this
project.

First of all, I would like to thanks the Managing Director of this Company for providing
necessary information for my project. As well as, I extend my heartfelt thanks to the members of
the agency, who had helped me in preparing this report.

I would also like to express my warm appreciation to my teacher SUPERVISOR NAME for his
keen supervision over me during this work whose help, stimulating suggestions and
encouragement helped me in all the time.

STUDENT'S NAME
COLLEGE NAME
Date:-

v
 TABLE OF CONTENTS
Title Page………………………………………………………………………………………… i
Declaration ……………………………………………………………………………………… ii
Supervisor’s recommendation ………………………………………………………………. iii
Endorsement……………………………………………………………………………………. iv
Acknowledgement……………………………………………………………………………… v
Table of Contents ……………………………………………………………………………… vi
List of Tables…………………………………………………………………………………… vii
List of Figures…………………………………………………………………………………. viii
Abbreviations …………………………………………………………………………………… ix
CHAPTER I: INTRODUCTION
1.1 Background……………………………………………………………………… 01
1.2 Statement of the Problem…………………………………………………..……. 02
1.3 Objectives of the Study …………………………………………………………. 03
1.4 Rationale of the Study…………………………………………………………….. 03
1.5 Literature Review…………………………………………………………………..04
1.6 Research Methodology………………………………………………………………
05
1.7 Limitations……………………………………………………………………….. 08
CHAPTER II: RESULTS AND ANALYSIS………………………………………………..
10
2.1 Financial Statement Analysis…………………………………………………… 10
2.2 Major Findings of the Study………………………………………………………18
CHAPTER III: SUMMARY AND CONCLUSION…………………………………………..
21
3.1 Summary……………………………………………………………………….. 21
3.2 Conclusion………………………………………………………………………..22
BIBLIOGRAPHY…………………………………………………………………………….. 24

vi
 LIST OF TABLES
S.N Title Page No.

Table No. 1 Liquid Assets to Total Assets Ratio …………………………..………11

Table No. 2 Liquid Assets to Total Deposit Ratio ….………………………. …….12

Table No. 3 Credit to Deposit Ratio …………………………. …………………...13

Table No. 4 Return on Equity …….…………………... …………………………..15

Table No. 5 Return on Assets ………………………………………….………….16

Table No. 6 Net Profit Margin …………………………. ……………..…………..17

Table No. 7 SWOT Analysis …………………………. …………………………...19

viii
 LIST OF FIGURES
S.N Title Page No.

Figure No. 1 Liquid Assets to Total Assets Ratio ……………………………………12

Figure No. 2 Liquid Assets to Total Deposit Ratio …………………………....…….13

Figure No. 3 Credit to Deposit Ratio ………………………….. ……………….…...14

Figure No. 4 Return on Equity …………………………. ……………………….…..15

Figure No. 5 Return on Assets …………………………... ………………………….16

Figure No. 6 Net Profit Margin ……………………………. ………………………..17

viii
viii
 ABBREVIATION

T.U.: Tribhuvan University

BBS: Bachelor of Business Studies
No.: Number
NMC: Nepal Multipurpose Cooperative
NEFSCUN: Nepal Federation of Savings and Credit Cooperative Unions
VDC: Village Development Community
NGO: Non-Government Organization
SWOT: Strength Weakness Opportunities and Threats
CDR: Credit to Deposit Ratio
ROE: Return on Equity
ROA: Return on Assets
NPM: Net Profit Margin
NRB: Nepal Rastra Bank

ix
ix
 CHAPTER I INTRODUCTION
1.1 Background of the study
As the world always follow dynamic environment, revolution in the past such as
agricultural revolution, industrial revolution, transportation revolution and political
revolution brought many dynamic changes in the civil society and economy of the world.
Now-a-days, the economy of the developing countries depends upon industries and
commerce. Finance is the life blood of trade, commerce and industry. Banking sector acts
as the back bone of modern business. Development of any country mainly depends upon
the banking system.
A bank is an organization whose principal operation is concerned with the accumulation
of the temporary idle money of the general public for the use of advancing to other for
the general public for the use of advancing to other for expenditure. Bank are financial
institution that accepts funds in the form of deposit repayable on demand or in short
notice. In board sense bank is an institution which trends in money through an
establishment of deposit custody on disuse of money also for making loans discounts and
facilitating the transmissions of remittance from one place to another place. Moreover, it
is which holds money for its clients which lends money at interesled and trades generally
in money.

Profile of Nepal Multipurpose Cooperative Limited.

Nepal Multipurpose Cooperative Limited is established on Poush 19, 2063 B.S. Nepal
Multipurpose Cooperative Limited has obtained permission from Nepal Rastra Bank to
operate as a “B” class National level financial institution. At present the Bank has been
upgraded as National level Development Bank from regional level by way of acquisition
to Dhading based development Bank Civic Development Bank Limited. The central
office of bank is situated at Kathmandu-28, Kathmandu of Kathmandu District. It has a
special wing for Micro-Credit finance which is a model for micro banking activities
throughout the development bank in Nepal.
The Bank is committed for good corporate governance practices and banking activities
with prudent banking culture. It has been offering various products and services for its
customers with competitive rate in market. It has been able to provide diversified service

1
(Modern Banking, Limited Banking and Microfinance) backed by the latest technology.
At present MNBBL is one of largest National level Development Bank with Branch
Network of 113 modern banking branches. 1 extension counters and 93 microfinance
desks with depositor’s base of more than 4 lakhs customers.

1.2 Statement of the problem

The researcher wants to evaluate the Investment analysis of Nepal Multipurpose
Cooperative Ltd. by using available ratios. The organization is going on profit or not is
the main issue to research and if the organization is on profit then what are the
consequences that the organization is in profit. Another problem is the condition of
nonpayment of current liabilities and assets management schedule. As a whole this
research is conducted to analyzed income statement balance sheet and various annexes of
Nepal Multipurpose Cooperative Ltd. to solve the problems that are being faced by the co
operatives in recent period. The study were to review financial analysis and evaluation of
co operative by using available ratios and some key problems listed below:-
 How to analyze the investment policy of Nepal Multipurpose Cooperative Ltd.?
 How to evaluate the liquidity, assets management, profitability and risk position
of Nepal Multipurpose Cooperative Ltd.?
 What is the growth rate of bank in terms on deposits, loans and advances,
Investment of Nepal Multipurpose Cooperative Ltd. ?

1.3 Objective of the study

I am willing to write the project report of Nepal Multipurpose Cooperative Ltd. There is
no doubt that co-operatives play a vital role in the optimum mobilization and utilization
of financial resources of a country. The study here has been with a view to examine the
financial strength and weakness of Nepal Multipurpose Cooperative Ltd, for this purpose,
following points will be considered in the research.
 To analyze the investment policy of Nepal Multipurpose Cooperative Ltd.
 To evaluate the liquidity, assets management, profitability and risk position of
Nepal Multipurpose Cooperative Ltd.

2
  To determine the growth rate of bank in terms on deposits, loans and advances,
Investment of Nepal Multipurpose Cooperative Ltd.
1.4 Rationale
In today's competitive world, this type of report study is very important for the bachelor's
level student. It contributes towards fulfillment of local services to the "Nepal
Multipurpose Cooperative Ltd." thesis can be beneficial. This study is important for the
study to investigations and the institution both as follows:
For the Investigators
I. Help to make practical use of study
II. Contributes towards developing the skill in investigators while interacting with
people.
III. Assist in developing capacity of making intense study on any topic
IV. It can be an information tool to students and other people conducting research
work.
For Nepal Multipurpose Cooperative Ltd. .
I. In case of any drawbacks it can receive suggestion and help for its progress.
II. The information collected income of research and investigations can be helpful
for future plan.
1.5 Review
Financial statement is the statement which provides Summary report that shows how a
firm has used the funds entrusted to it by its stockholders (shareholders) and lenders, and
what is its current Investment Analysis. The three basic financial statements are the
(1) Balance sheet, which shows firm's assets, liabilities, and net worth on a stated date;
(2) Income statement (also called profit & loss account), which shows how the net
income of the firm is arrived at over a stated period, and
(3) Cash flow statement, which shows the inflows and outflows of cash caused by the
firm's activities during a stated period. Also called business financials. Retrieved from
(www.businessdictionary.com, 2017).

S. Umamaheshwari, M. Ashok Kumar (2014) Awareness, environment level of exposure

intensions, beliefs, responsibilities are the factors responsible for deciding investment

3
policies. Behavioral pattern helps in preparing various schemes for investments.
Investment temperament of salaried strata based on investment awareness and expected
rate of investment return.

N. Dharani , et. al. (2014) Investment attracts all people irrespective of their occupation ,
education and social status. Women also involve in investment activities. Women’s
below age of 30 are involve in investment activities. Women’s with graduation are
involve in more investment activities. women’s with income of 50001 to 100000 are
involve in investment activities.

Bhawana Bhardwaj, et. al. (2013) National output is increase for future by investment.
Investment dependents upon awareness about investment opportunity, level of knowledge,
evaluation of investment opportunities and selection of investment options. Research
states that maximum respondents have selected as Bank deposits and Provident fund as
investment avenue. Investors preferred stability in return of investment.

S. Umambheswari, M. Ashok Kumar (2013) When one know the existence of a new
thing is known as awareness. External sources are responsible for creating, modifying
and shaping investment decision of investors. Television, Radio, Print media, personal
consultation for expert, relatives, friends etc are responsible for decision investment
decision.

R. Sreepriya, P. Gurusamy (2013) Additional income or growth in value can be achieved

by investment. Waiting for rewards is the main characteristic of investment. Investment is
allocation monetary resources to get returns over given period. Surplus funds are invested
with different channels by salaried class people. This research analyses the different
investment avenues. 81 percent respondents faced problem at the time of investment.

L. Pandiyan, T. Aranganathan. (2012) Decision making process on savings and

investment is affected by the attitude of the respondent. Study analyses shows that level

4
of attitude of male and female, female group are not interested in investment but more
wrong investment decisions are.

1.5.1 Review of Previous Works

The researcher has reviewed the following previous works to make this research more
meaningful. Luitel, (2016) conducted a mini research entitled financial analysis: A case
study of Nepal Multipurpose Cooperative Ltd, The objectives were to study the
protection indicator, the effective investment structure of the finance company, to study
the protection indicator, the effective investment structure of the finance company, to
study the assets quality, the rate of returns, liquidity position offinance and to study the
sign of grown and to provide recommendation and suggestions based on analysis of
company financial statement.
Another research work conducted by Ghimire, (1996), entitled “A investment analysis of
manufacturing public enterprises in Nepal.” The objectives of the study are to exmine the
Investment Analysis and to analyze the financial performance of Lumbini sugar Mills and
the major findings of his study were overall liquidity position was satisfactory where as
assets management and profitability condition were not in condition of satisfactory. The
researcher conducted this research based on secondary data.

1.5.2 Research Gap

After reviewing the researches done throughout the past, the present researches has found
that comparative study of the investment analysis of the finance company has not been
long analyzed especially the Nepal Multipurpose Cooperative Ltd. . The past studies have
recommended some of the remedial references like to reduce the debt, increase the
liquidity, to limit the operating cost. It's been time to check how far the differences have
occurred in the financial institution. The present study explores the comparative and
investment analysis of the company.
The purpose of this research is to develop some expertise in one's area, to see what new
contribution can be made to receive some ideas, knowledge and suggestions in relation to
comparative investment analysis of the company.

5
Thus, the previous studies can be ignored because they provide the foundation to the
present study. In other words, there has to be continuity in research. This continuity is
research is ensured by linking the present study with the past research studies. Here, it is
clear that the new research cannot be found on that exact topic, i.e. Investment analysis
therefore to fulfill this gap, this research is selected. To complete this research work:
many books, journals, articles and various published and unpublished dissertation are
followed as guideline to make research easier and smooth. In this regards, here we are
going to analyze the different procedure of investment analysis. Our main research
problem is to analyze whether the sample company has right level of profitability and
liquidity as well as is able to utilize resources effectively or not. To achieve this main
objective, various financial and statistical tools are used. Therefore, this study in expected
to be useful to the concerned banks as well as different persons; such as shareholders,
investors, policy makers, stockbroker's, state of government etc.

1.6 Research Methodology

"Research Methodology is the Scientific method is a systematic step-by- step procedure
following the logical processes of reasoning". This section deals with rationale for the
selection of study area, Population and sampling, tools and techniques of data collection
observation, interview and at last data presentation.

1.6.1 Types of Research

It presents research methodology adopted in achieving the objective stated in the earlier
chapter. It contains research design, sources of data, data gathering procedure and data
analysis tools. The main objective of this report is to analyze, examine, highlight and
complete the investment analysis of Nepal Multipurpose Cooperative Ltd. and
recommend and suggest for better performance. So the propose of this study is to analyze
and fulfil the stated objectives research methodology refers to the various sequential steps
to be adopted by a reporter in studying a problem with certain objectives in view. It’s the
way to solve the research problem systematically.

6
To achieve the motive of the study, research methodology that has been followed in such
factor including research design, sample size, sources and type of data, data gathering
instruments and method analysis etc.

1.6.2 Population and Sample

All the commercial banks operating in the country is the population of the country among
them one of the joint venture Finance company ltd. investment company Ltd is selected
for the study. The sampling technique used in this study is purposive in nature and
judgment. This research covers the period of five fiscal years..
1.6.3 Data Collection Procedure
For the purpose of an analysis, financial statements, profits and loss account and balance
sheet of a concerned bank has taken financial as well as statistical tools have been used.
Financial performance is analyzed through the use of important tools.

1.6.4 Instrument
Informal Interviews of the qualitative nature was conducted in the study areas. The
interview were directive one and probed the different dimensions of how dairy should be
advance in the present context. The interview also assessed on how to convert the
existing subsistence level of dairy farming to commercialization of it. The training
regarding livestock farming, the veterinary services available in the region and the
possible strategy of increment of dairy components, problem of dairy farming, possible of
market and the how the member were satisfied about the dairy services were probed on
the interview Key Informant Interview : Chairman and secretary of the finance company
were taken as the key informant.

1.6.5 Techniques of Analysis

Some data collected through semi-structured interviews were processed manually. They
are edited and coded and computerized for further analysis in MS Excel. The collected
data were analyzed. Simple statistics such as percentages was used. Bar diagram and
tables were used according to the need of the study. Out of these various financial tools
following ratio analysis has been used for this study.

7
1.6.5.1 Financial tools
Liquidity Ratio
i. Cash and bank to total deposit ratio
ii. Current deposit to total deposit ratio.
Profitability Ratio

i. Return on equity (ROE)

ii. Return on Assets (ROA)
Others Ratio

i. Earnings per share(EPS)

ii. Price Ratio (P/E ratio)
iii. Net profit margin (NPM)
1.6.5.1 Statistical tools
For supporting the study, statistical such as supporting mean, standard deviation,
coefficient have been used under it.

1. Arithmetic mean (Average)

Average is statistical constant which enables us to comprehend in single effort the
significance of the whole. It represents the entire data by a single value.

It provides the gist and gives the bird's eyes view of the huge mass of unwieldy
numerical data. It is calculated as:

𝛴𝑋
Mean (𝑥) =
𝑁

Where, 𝑋 = Arithmetic Mean

N = Number of observations
𝛴X = Sum of observations

2. Standard deviation (S.D)

8
 The standard deviation is the square root of man squared deviation from the
arithmetic mean and denoted by S.D. or σ. It is used as absolute measure of
𝛴𝑥2 𝛴𝑥
dispersion or variability. It is calculated by: S.D (σ)= +( )2
𝑁 𝑁

Where, σ=standard deviation

𝛴𝑥2
=sum of squares of observations
𝑁
𝛴𝑥 2=
( ) sum of square of mean
𝑁

3. Coefficient of variation(CV)
1.7 Limitation of the study
Financial analysis provides various form of financial information that investors and
creditors use to evaluate a company's Investment analysis. Company financial conditions
are major concern to investors, depositors and capital providers as they rely on company's
financial condition for the both safety and profitability of their investment. In the same
way co-operatives also have the financial analysis cannot be free from its own limitations.
They are: -
 This analysis is mainly based on secondary data sources such as annual reports,
magazine etc. depends its reliability of conclusion of the study upon the accuracy of
secondary data.
 The study is concerned with the investment policy of the Nepal Multipurpose
Cooperative Ltd. .
 As Co-operatives being highly secured financial institution all its information are
disclosed to the outsiders so it was difficult to researchers to collect hidden
information about Company security.
 This study is focused only for academic purpose meeting all the required minimum
criteria for the partial fulfillment of bachelors of business study.
 The study covers only the investment analysis of the 5-years data from 2079/80 to
2079/80, which is very short period to analyze the investment policy.

9
 CHAPTER II RESULTS AND ANALYSIS

2.1 Presentation of Data

In this chapter the researches has analyzed and interpreted relevant and available data of
the Nepal Multipurpose Cooperative Ltd, according to the next research methodology as
mentioned in the previous chapter. The analysis of data consists of organizing, tabulating
and evaluating the collected data.

2.1.1 Investments
Investment can be derived employ to generate more money in future, people who invest
is called investor it can be natural or artificial person, When investor does the investment
they have to consider two major aspects one is Risk and another is Return. Return can be
considered as the primary motive for the investment, whereas Risk is obstacle to reach
the target Risk and Profit are inter- related, higher the risk higher the profit and vice-versa.
Investor can buy stock, bonds of companies or deposits into bank, buy a land, gold or
silver, all these activities involve sacrificing of present money in the expectation of future
return so they are all investment. The objectives of the investment is to maximize profit
and wealth of the investor.

Investment can be of two types Real Investment and Financial Investment. if investment
is done in tangible assets like land and machinery is real investment. It has productive
capacity investment is financial assets like common stocks and a bond is financial
investment. It does not directly possess productive capacity. The value of financial assets
is derived from the value of real assets of the firm. True investor is interested usually in
long term investment with a good rate of return earned on a consident basis with a low
risk as possible but there may be some irrational investment in the market. People seek
opportunities promising high rate of return, earned rather quickly, or say abnormal rate of
return than the moderate rate of return, so investment period may be days to few months.
People invests with their a few saving money in case of bank its source of fund are
deposit equity capital and sometimes even loan is borrowed from other bank to invest.

10
Deposit is one of the bank's important sources of funds. Deposit is the investment for the
depositor as he receives interests from bank for his deposit. Bank mobilizes its funds
accumulated from different sources in various investment alternatives such as
government, corporate securities, mutual fund, industrial project, by providing loans,
advances, overdrafts etc.

Even though profit and risk is important factor while investing they are not only the
factor that investor has to consider There are other factors that investor has to take in
account. They are taxes, market environment, Govt. rules and regulations, etc. The world
investment brings forth vision of profit, risk, speculation and wealth.

2.1.2 Investment Analysis

A bank makes investment for the purpose of earning profits. Before that they keep
primary and secondary reserves to meet its liquidity requirement. So to match the
liquidity position and to gain the profit also investment policy has to be made. To
maintain adequate liquidity in the bank should be one of the major policies while
investing.
One of the most important problem in the banking industry is the investing its deposits
and capital in various forms of earning assets. This is also known as the portfolio
management. The investment policy of bank is highly influences by the nature of funds
for its investment. There are mainly two types of funds in the bank for investment i.e.
capital and deposits. Deposits constitute the major portion for the investment purpose.
Bank can also take loans from other bank to invest. The bank should be able to clear the
policy of its investment by making deep study on the subjects that which sector would be
the more trust worthy and dependable to invest by the amount collected.
A bank should lay down its investment policy in such a manner so as to ensure the safety
and liquidity of its funds to meet the potential demand of its customers and at the same
time maximize its profits. This requires adherence to certain principles. In regards to a
commercial bank there are basically some major principles, which they follow while they
formulate their investment policies.

11
2.1.1.1 Return on assets (ROA)
Return on assets ratio measure the profitability with respect to the Total Assets. In
present this ratio is examine to measure, the profitability of all financial recourses
invested to the assets banking. A high ratio usually indicated efficiency in utilizing its
overall resources and vice- versa. The return on assets has been calculated using the
following formula.

Net profit after tax

ROA= Total assets
× 100

Table No: 1 Return on assets

year NEAT Total assets ROA (in %)
2075/76 250305 2754620 9%
2076/77 347304 2954640 12%
2077/78 200906 4844412 4%
2078/79 741970 8869451 8%
2079/80 1596757 16669325 10%
Average 9%
Source:- Annual report of Nepal Multipurpose Cooperative Ltd,

Above data shows, the satisfactory result the fund investment in assets is fully
covered. It shows during the year 2077/78 the bank gives satisfactory result, which
means the bank bear from last six years. In the fiscal year 2079/80 the ROA is 10%
which is second highest percent. Likewise, in the fiscal year 2076/77 the ROA is
highest in percent.

12
 Figure No-1 Return on assets

2.2.1.2 Total Investment to Total Deposit Ratio:-

Investment is one of the major sources of earning money. This ratio includes how
properly firm’s deposits have been invested on government securities and shares and
debentures of other companies. It can be shown as:
Total Investment to Total Deposit Ratio= Total Investment
Total deposit

2.2.2 Return on the Deposit

The net profit to total deposit ratio enables to evaluate what extent the management has
been able to mobilize and utilize. The deposit furthers more its sends to identify banks to
overall performance as well as its success in generating profit. It is important to analyze
to ratio in order to ignore whether the institution is well efficient or not in mobilization its
total deposit so the correct action could be forwarded. It is calculated as under.
Net profit after tax
Return on total deposit= Total deposit
× 100

Table 2 Return on the Deposit

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 Year Total Deposit NPAT ROTD in %
2075/76 1236642 250305 20%
2076/77 1420004 347304 24%
2077/78 2348677 200906 9%
2078/79 4494329 741970 17%
2079/80 8400920 1596757 19%
Average 18%
Source: Annual report of Nepal Multipurpose Cooperative Ltd,

According to the above data, there is satisfactory result as it has the bank is efficiently
mobilizing its deposit in an effective way, as there is fluctuate in deposit as well as in net
profit.

Figure-2 Return on the Deposit

2.2 Analysis of Results

2.2.1 Interest earned on total assets ratio

Interest earned to total assets ratio measures the interest in relation to total assets of the
bank ratio signifies the mobilization of assets in interest generating purpose. A high ratio

14
reflects the better efficiency in utilizing the resources in interest generation sector and
vice-versa. It can be calculated as under:
Formula:
Interest Earned
IETS= Total assets
× 100

2.2.3 Table 3 Interest Earned on Total Assets Ratio

Year Interest Earned Total Assets IETS in %
2075/76 193255 2754620 7%
2076/77 249413 2954640 8%
2077/78 520244 4844412 11%
2078/79 948006 8869451 11%
2079/80 2317608 16669325 14%
Average 10%
Source: Annual report of Nepal Multipurpose Cooperative Ltd,

From the above data, we could analyze that the bank is in averages, could increase in
increased ratio. In the fiscal year 2079/80 the total assets is 16669325 which is only 14%
likewise in the fiscal year 2075/76 the interest earned is 193255 which is 7% of the total
assets.
Figure-3 Interest Earned on Total Assets Ratio

The above figure no -3 shows that in the fiscal year 2079/80 the total assets is 16669325
which is only 14% likewise in the fiscal year 2075/76 the interest earned is 193255 which

15
is 7% of the total assets. Total interest earning lower than the previous years due to many
reasons such as political condition and due to internal violence of the country but with
stable in the country the total collection of the bank has increased in the resent year.
 Return of Capital Employed
 Return of Equity ROE

2.3 Findings
The above data and analysis shows the following findings. They are as follows:-
 Increment in ROA is higher in the year 2076/77 (i.e. 12%)
 ROA is good in the year 2076/77 but its change decreased to 4.0% from in
the fiscal year 2077/78
 During 2076/77 Return on deposit was 24% and in fiscal year 2072 /73 the ROD
is 9%
 Interest earned to total assets ratio seems good in the year 2075/76 whereas
interest income is high in the year 2078/79.
 Commission and discount ratio seems higher during 2078/79 whereas
Commission and discount is higher in the year 2077/78 (i.e. 77.71 millions).
 Loans and Advances to Total deposit ratio is higher in the year 2075/76 (i.e.
85.4%. These are highly correlated by 0.950).

16
 CHAPTER III SUMMARY AND CONCLUSION

3.1 Summary
Firstly, the researcher concluded that the overall liquidity position of organization is
satisfactory due to its efficient management of current assets and liquid assets, in
comparison to current liabilities. Secondly in the case of management TATOR is not
satisfied but fixed assets are well managed to achieve better FATOR. The profitability
condition of the cooperative is seems to be better. Its net profit margin is in increasing
rate every year. Although here are lots of challenges in co operatives, it is well managed
co operatives. The return on equity position is also in better condition which helps to the
organization operates smoothly.
It is found that, liquidity position of the organization is satisfactory due to its efficient
management of current assets and liquid assets in comparison to current liabilities. It is
because of there is not any Investment opportunity available in the Nepalese economy,
which leads to overstock in cash in hand and cash at bank. Another reason for the
similarities is the tradition of credit transaction rather than cash transaction which leads to
increase in debtors and receivables.
On the other hand there are some dissimilarity with the previous research regarding co
operative. It is found that assets management and debt management were not in proper
condition. The researcher finds that there is better management of fixed assets to achieve
better fixed assets turnover ratio and better debt management ratio. Profitability condition
this research and previous research work contradict to each other due to separate goal of
cooperative organization and manufacturing industry is profit oriented industry where as
cooperative has a goal of social welfare. The other reason for the contradicting results
were political instability economical inequality, geographical positioning and topography;
saving and consumption pattern and organizations philosophy. That is the reason of
similarities and contradicting the result of this research and previous research which is
gathering from secondary data.

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3.2 Conclusion
Investment policy is an essential managerial tool for timely achievement of institutional
objective. Ratio analysis is required to cope with competition for the growing business,
strategic management, planning and controlling after ratio analysis, management
committee and the manger should be able to make strategic decision, capital budgeting
decision, working capital management and proper staffing and proper stocking. And
finally they have to be able to handle the proper business and organizations and its needs.
After the analysis and interpretation of the data, the following conclusion has been
derived from this study. The co operative has a satisfactory performance. Therefore the
co operative is a safe place to deposit the money for depositor. The Nepal Multipurpose
Cooperative Ltd. has an effective financial structure because the Finance assets
management ratio, liquidity ratio and profitability ratio is seems to be satisfactory by
analyzing available ratios. Here, average current ratio is 1.35 and average quick ratio
is1.26 which indicates the liquidity position of the co operative. Total assets turnover
ratio and fixed assets turnover ratios are 0.10 and 28.32 respectively. The profitability
condition is seems to be good by reviewing average net profit margin is 45.55 and
average ROE 18.67
 It is observed that there is consistency in between current assets and current
liabilities in Nepal Multipurpose Cooperative Ltd. . Hence, the quick assets are in
proper condition. Current assets and current liabilities for coming years can be
predicted by analyzing the past data.
 Nepal Multipurpose Cooperative Ltd. is not maintaining an appropriate capital
structure in terms of long term solvency. Appropriate capital structure should be
made by adjusting the proper mix of debt and equity. It is better to use long term
debt to take the benefit of leverage.
 It is obviously that most of the people of our country reside in rural areas where
the main occupation is agriculture. Nepal Multipurpose Cooperative Ltd. should
provide more co operative education training to increase its number of
shareholders in eastern part of Nepal.

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 This study alone cannot fulfill the entire requirements of Nepal Multipurpose
Cooperative Ltd. .

BIBLIOGRAPHY

 Adhikari, D.R. (2016). Research Methodology. Kathmandu: Asmita publication

 Bajracharya, B.C. (2070). Business Statistics. Kathmandu: MK publishers and
Distributers
 Brigham, EF and Hoston, J.F (2012). Fundamentals of financial management (11th
ED) Delhi:Pearson Education.
 Brigham, E.F. Financial Management theory and practices. UK: Mcgrehill
 Ghimire, B.P. (1996). A Financial Analysis of Manufacturing Public finance
company in Nepal
 Joshi, P.R. (2013). Fundamentals of financial management. Kathmandu: Asmita
publication private limited
 Pant, P.R. (2009). Social science research and thesis writing. Kathmandu:
Buddha Academic publisher and distributer
 Poudel S.R., (2013). Principles of management. Kathmandu: Asmita Publication
 Annual Report of Nepal Multipurpose Cooperative Ltd. , (2075/76 to 2079/80)
 Audit Report of Nepal Multipurpose Cooperative Ltd. , (2075/76 to 2079/80)

Websites
 http://www.zenwealth.com/businessfinanceonline/RA/RatioAnalysis.html
 https://en.wikipedia.org/wiki/Financial_statement
 www. google.com

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