1.

1 Background of the study

Maximization of profit is the main objective of each and every business concern.Every business
concern look forward for gaining more profit as much as possible because it is very important for
the successful running of the business and for achievement of better competitive position is the
market. Profit is the life of the organization. Without Profit no organization can survive in the
industry in the long run. The excess of revenue earned over the cost incurred is profit. Simply we
can say profit is the surplus of income over the expenses. In this globalize word most of the
business concerns are profit oriented. Profit is the indispensable part of each and every
organization to preserve the existence of business as well as strength them and export it in the
whole world.
A company or corporation uses a profitability ratio to determine how profitable it is. The money
a company has left after deducting all expenses like income and operating costs is its
.profitability. Liquidity, known as “marketability,” is different because it has nothing to do with
a company’s ability to make a profit. It simply provides the organization with a way to get cash
quickly, without losing anything. Liquid assets can be stocks, government bonds or money
market account. Profit is what accrues capital at the end of a period of activity as a result of a
difference between the value of sales and the cost of raw material, labor and capital that went
into the production of the goods sold. Liquidity is the availability of a capital at each and every
point of the working capital cycle to ensure the smooth flow of production through the business.
1.2 Profit of Century commercial Bank Limited
With an authorized capital of NPR 10 billion, issued capital of NPR 7.56 billion and paid up
capital of NPR 4.58 billion, Century bank limited is one of the nation’s premier financial
institution consistency living it’s service pledge to conduct business by continually creating
mutually beneficial relationships with all its stakeholders; Customers, shareholders ,Regulators,
Communities and staff The bank realizes that its success is directly correlated with the pace at
which it fosters its relationship with its stakeholders , so that in every step of its journey, both
parties benefit, succeed and grow together.
Following the completion of all regulatory requirement, Nepal Rastra Bank had issued Century
Bank its Operating License on 4th Shrawan 2067 and the bank had commenced banking
operations from 7th Shrawan 2067 Now with the Bank having completed seven years of
operations is on its way to realizing the aspirations of 1,219 Promoters who comprise primarily
from middle class families spread over 63 Districts of Nepal. The promoters held the vision to
establish a national level class ‘A’ full service Commercial Bank which was made a reality by an
experienced and able Management Team and staff members driven by a mission to provide
Banking service to the entire economic strata of the Nepalese society from ‘Halo to Hydro’.
1.3 Objectives of the Study
The main objective to prepare this report is to study different aspects related to liquidity and
Profitability of the bank which can be summarizing in the following points:
 To identify the liquidity position of the bank.
 To analyze the profitability position of the bank.
1.4 Rationale of the Study
Good and optimal fund mobilizing policy depicts the health of the banks. This would make a
good impact on economy of a country if the banking sector poses a firm and by astronauts’
behavior that is only possible when the fund mobilizing policy of the banks consider customer,
national and government interest. The proper mobilizing & utilization of domestic resources
become indispensable for any developing country aspiring for a sustainable economic prosperity
of the nation. The success and prosperity of the banks relies heavily upon the successful
formulation and effective implementation of investment practices.
The significances of the study are pointed out below:
 The study helps to know how well the banks CBL are utilizing their deposits.
 The study is important to policy makers and academic professionals to formulate policies
and plans on the basis of the performance of these banks.
 The study helps these banks to make sound programs and policies based on the
recommendation suggested.
 The study guides to investors, customers (depositors, loan takers as well as other types of
clients), competitors, personnel of the banks, stockbrokers, dealers, market makers, etc. to
take various decisions regarding deposits and borrowings.
 Moreover, the study will be fruitful to students and various other groups having interested
in banking sectors.
 The study will help to increase their knowledge regarding deposits, fund and its
utilization and investment situations of Nepalese commercial banks.
1.5 Review of Literature
Review of literature is a stocktaking of available literature in the field of research. It supports the
researcher to explore the relevant and true facts for the reporting purpose in the field of research
study. Literature here means the related printed material about the subject matter of the research
work. It may be in various forms like book, booklet, thesis, reports etc in the courses of research,
review of existing literature would help to check the chance of duplication in the present study.
1.6 Research Methodology
Research methodology reflects how the data are presented by using various tools and techniques.
It is also a main part of a report as it shows how clearly and effectively the researcher has
presented the report. The main methods that are used for the study in order to prepare this report
are following:
1.6.1 Research Design
This research has followed the descriptive research design. A research design is purely and
simply the basic frame work or plan for a study that guides the collection and analysis of the data
in liquidity and profitability analysis, the researcher adopted the research design in the collection
and analysis of the data. The idea behind this type of research is to study frequencies, define,
factors, relations, averages, findings, and other statistical calculations. Although this research is
highly accurate, it does not gather the causes behind a situation.
1.6.2 Sources of data
All the secondary data are complied, processed and tabulated in the time series as per the need
and objectives of the study. Formal and informal talks with the concerned authorities of the
banks are also very helpful to obtain the additional information of the related problem.
Information collected by government departments, organizational records and data that was
originally collected for other research purposes. The secondary for the study are as presented
below. This study mainly based on based on secondary data of the data. The review of literature
of the proposed study was based on the text books, official publications, journals, unpublished
thesis, wed site etc. The necessary data and information at micro level have been collected from
relevant institutions and authorities such as NRB Ministry of finance, NEPSE, SEBON and their
respective publications similarly the required micro level data derived from annual reports of
selected banks, SEBO and NEPSE. In addition to above, supplementary data and information
were collected from different library such as library of Resunga Multiple Campus, T.U. central
library, SEBO etc. The major sources of data and information are as follow;
 NRB Economic Report, NRB
 Non-Banking Financial Statistics, NRB
 Banking and Financial statistics, NRB
 Annual Report of concern Commercial Banks (from 2015/16 to 2020/21)
 Annual Report of SEBO Nepal
 Trading Report of NEPSE
1.6.3 Population and Sample
In this study the researcher has selected on financial analysis of Century commercial bank
limited. The researcher used maximum combination of years and number of banks and achieved
the maximum number of observation through purposive sampling technique. Thus, banks that
operate less than five years were excluded from the sample. There are 28 commercial banks in
Nepal but the research has selected only CCBL. For the purpose of the study it would not
possible to collect information and data from the all organization during the five year period i.e.
2072/73 to 2076/77. The researcher has concluded data and collected information is analysis in
the study.
1.6.4 Data Analysis Tools
Various financial and statistical tools are used to make the analysis more effective percentage
and ratio. Similarly, trend analyses have also been used for liquidity and profitability analysis.
The various tools applied in this study have been briefly presented as under:
 Table
 Trend line
 Percentage
1.7 Limitation of the Study
The present study is tried to analyze and to examine the profitability and liquidity position of
Century. The main limitations of study are as follows:
 The study is mainly based on secondary data.
 The study has covered only five fiscal years i.e. from 2072/73 to 2076/77.
 This study based only financial tools are used.
1.8 Organization of the Study
This study is organized into three chapters.
Chapter One: Introduction
It deals with introduction part. This chapter contains various aspects of the study. It includes
background of the study, profile of organization, objectives, Rationale, Review literature,
Research Methodology and limitations of the study.
Chapter Two: Results and Analysis
In the two chapters, collected data & information will be analyzed & presented in a pleasant
manner. In mainly will consists the analysis.
Chapter Three: Summary and Conclusion
And the last chapter is about Summary and conclusion, which present implications of conclusion
for practical application or future studies.
The exhibits bibliography is incorporated at the end of the study.
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Review on Related Studies
Mahat, N (2004). Profitability of Nepalese Development Bank Kathmandu: TU.
Shrestha, R (2009), Liquidity and Profitability Analysis of Sangrila Development Bank
Limited Butwal: Lumbini Banijya Campus.
Subedi, M (2012). Liquidity and Profitability Analysis of Sangrila Development Bank
Limited Kathmandu: TU