Data Analysis and Interpretation
Data Analysis and Interpretation
Data Analysis and Interpretation
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
INDUSTRY PROFILE
The present study of financial performance of Tamil Nadu State Apex Co-
operative Bank, Chennai is intended to examine the current practices of financial performance in
the regard under the present inflationary condition management of an even management of profit
and this requires greatest affection of the financial performance. The Project communicates
financial information to the users though statements and reports. The financial statements
contain summarized of the firm’s financial organized systematically.
Two basic financial statements prepared for the purpose of external reporting are
Traditional financial statement includes the balance sheet and in the profit and
loss account of TNSC Bank, and balance sheet for the last four years i.e. 2014-17 to fine the
financial position of TNSC Bank.
FINANCIAL ANALYSIS
Financial analysis is the process of evaluation of relationship between component
parts of financial statements to obtain a better understanding of the firm’s position and
performance. Financial analysis will give the management considerable insight into levels and
areas strength or weakness. Financial Statements are prepared primarily for decisions-making.
They play a dominant role in setting the framework of management decisions. But the
information provide in the financial statement is not an end in itself as meaningful conclusions
can be drawn from these statement alone.
External Analysis
Internal analysis
This analysis is done on the basis of internal and unpublished records. It is done
by executives or other authorized official. It is very much useful and significant to employees
and management.
ON THE BASIS OF MODUS OPERANDI OF ANALYSIS
Horizontal analysis
In the case of this type of analysis, financial statement for number of years are
reviewed and analyzed. The current year’s figure are compared with in the standards or base
year. The analysis statement usually contains figures for two or more years and the changes are
shown regarding each item form the base year usually in the form of percentage. Such an
analysis gives the management considerable insight into levels and areas of strength and
weakness. Since this type of analysis is based on the date from year rather than on one date, it is
also termed as “Dynamic Analysis”.
Vertical Analysis
Vertical analysis is also known as ‘Static analysis ‘or ‘Structure’. This analysis is
made on the basis of a single set of financial statements prepared at a particular date. Under
vertical analysis, quantitative relationship is established between different items shown in a
particular statement. Common-size statements are expressed as a percentage to any one item as
base.
Balance sheets as on two or more different dates are used for comparing the
assets, liabilities and net worth of the company. Comparative balance sheet analysis is useful for
studying the trends of an undertaking.
ADVANTAGES:
Common size statements indicate the relationship of various items with some
common items, (expressed as percentage of the common item). In the income statements, the
sales figure is taken as basis and all other figure are expressed as percentage of sales. Similarly,
in the balance sheet the total assets and liabilities is taken as basis and all other figure are
expressed as percentage of this total. The common size statements are useful in interpreting the
financial performance of the company.
In financial analysis , a ratio is used as a benchmark for evaluating the financial position and
performance of a firm the absolute accounting figures reported in the financial statements do not
provide a meaningful understanding of the performance and financial position of a firm an
accounting figure convey meaning. When it is related to some other relevant information.
MEANING OF RATIO
A ratio is only a comparison of numerator with the denominator. The term ratio
refers to the numerical or quantitative relationship between two figures. A ratio is the relationship
between two figures is obtained by dividing the former by the latter. Ratios are designed to show
how one number is related to another. It is worked out by dividing and number to another.
TYPES OR RATIOS
Liquidity Ratios
Leverage Ratios
Activity Ratios
Profitability Ratios
IMPORTANCE OF RATIO
The co-operative banks in India started functioning almost years ago. Co-
operative Banks in India are registered under the co-operative societies Act. The co-operative
bank is also regulated by RBI. They are governed by the banking regulations Act 1949, the co-
operative Bank is an important constituent of the financial system, judging by the role assigned
to co-operative, the expectation the co-operative is supposed to fulfils, their number and the
number of offices the co-operative bank operate. Though the co-operative movement originated
in the west, but the importance of such banks have assumed in India plays an importance role
even today in rural financing. The business of co-operative Bank in the urban areas also has
increased phenomenally in the recent years due to the sharp increase in the number of primary
Co-operative bank.
Farming
Cattle
Milk
Hatchery
Personal Finance
Self- employment
Industries
Small scale units
Home finance
Consumer finance
Personal finance
The co-operative banks can trace it origins backs to 1872 and the formation off
the loan and deposit department of the co-operative wholesale society. Four years later it
changed its name to CWS Bank although in the early years it only took deposits and granted
loans to the thousands of loans retail co-operative societies, it was not long before it was acting
as the bank of personal consumers.
The bank grew steadily, with branches opened in Newcastle, Landon and
Glasgow. After the First World War, the first in store banking points were established in co-
operative store and more branches were opened in key locations. By 1972 the bank which was
then known as the co-operative banks, had 321 branches thought-out the countries. In 1975 the
co-operative bank become the first bank, for some forty years to join the committee of London
clearing banks and then it has grown at rapid rate.
Today, the co-operative bank is the only UK clearing bank to publish an ethical
stance whereby clearly tells its customers who will not do business with. Since launching ethical
positioning in May 1992, thousands of concerned people who do not wish their money to not be
used for unethical reasons have had the opportunity to choose a likeminded bank.
The co-operative bank was one of the first banks to offer its customers a twenty
four hour a day telephone banking services (especially develop for small and medium sized
companies).
The co-operative bank also has a most commendable history of doing good,
supporting good causes such a mental health.
The co-operative bank offers secured loans, with terms which can be seen on the
co-operative bank website, and which are good in comparison to “other more expensive loans are
credit cards”. Of course you have to pay the money back, but the idea is to barrow a sensible
amount and it back over reasonable period as agreed.
At the time of publishing (2004-2007), one can borrow any amount up to $25000
and pay it back by affordable payments over one to seven years and even take out insurance to
cover repayment problem. Also “be safe in the knowledge that the rate is fixed throughout the
term of the loan” which is an important consultation were some other banks have variable rate
which could do something scary. Also the co-operative bank has an ethical manifesto with the
co-operative bank, you can be certain that the money you have barrowed has not come from the
profits of necessary pollution, human rights abuses or nay other activity which conflicts with
strict ethical policy.
The mission of the bank is to mobilize resources, provide banking products and
other professionalized service to the people, strengthen the affiliates, provide vibrant leadership
to the co-operative banking system, achieve growth and ultimately to attain prime position in the
banking industry.
INTRODUCTION
The Tamil Nadu State Apex Co-operative Bank Ltd. (TNSC Bank Ltd)
functioning in Tamil Nadu are fulfilling the credit requirement of the farmers, weavers, rural
artisans, consumers of the urban area. These institutions are known as so-operative credit
institution. The TNSC Bank is providing agriculture credit for both short-term and medium-term
loans to farmers and also providing non-agricultural credit for enlistment of the farmers and the
rural population through DDCB. The TNSC Bank has been playing a major role by providing
refinancing facility for the successful running of the public Distribution system in the state.
The TNSC Bank was formed in the year in which the co-operative movement of
Tamil Nadu was formed. The TNSC Bank has got license from Reserve Bank of India to carry on
the Banking business. It has been under closely supervised by NABARD as per guideline.
The TNSC Bank Ltd was registered on 23rd November 1905 and started
functioning on 26th November 1905. The bank has completed 105 years and entered into the 106th
year of useful service to the farmers and weavers of Tamil Nadu by extending the require credit
though the various Co-operative Banks, primary Agricultural Co-operative Banks and primary
weaver’s Co-operative societies. The bank was included in the second schedule of RBI in July
1966 and licensed in August, 1972.
STATE LEVEL
DISTRICT LEVEL
PRIMARY LEVEL
At the grass root level (primary level), there are 4010 primary Agricultural co-
operative banks (PACBs) and functioning at village level.
At the district level, there are 23 central co-operative Banks (CCBs) are
functioning in various places of the districts concerned.
PROCESS OF FINANCING
APEX BANK
DCCBs
PACBs
FARMERS
ORGANISATION CHART
SPECIAL OFFICER
BRANCHES
The TNSC Bank is catering to the needs of the public in Chennai through its
network of 44 branches and 1 extension counter situated in and around the city.
MANAGEMENT
Issues of D.D
Collection of bills
Issue letter of credit
Letter of guarantee and
ATM
SCHEMES
Savings Bank
Current deposit
Recurring deposit
Cash deposit
NRO/NRE Account and
Safe deposit locker facility.
BORROWINGS
NABARD for extending credit facilities to the farmers for the short-term Agricultural
Operations and Medium-term loans through DCCB’s.
SIDBI for extending credit facilities to the weavers finance the DCCB’s for extending
credit facilities for small scale industries from SIDBI.
NCDC (National Co-operative Development Co-operation) and NHFDC (National
Handicapped Finance Development Corporation) for financing for the development for
physically challenged persons through DCCB’s.
INVESTMENTS
The TNSC Bank Ltd has to make investment in government approved securities
for the statutory liquidity ratio (SLR) purpose. The bank has been investing its funds in the
central government/state section to deal with treasury operations on its behalf as well as its
affiliates, viz, DCCBs and urban Co-operative Banks. The Banks investments in government
securities (both central and state), bounds of the NABARD, IDBI, SIDBI, TNEB and trustee
securities shares etc., aggregated to Rs.1614.57 crores as on 31.03.2010 as against Rs.1458.51
crores as on 31.03.2009.
Through DCCB’s TNSC Bank Ltd have been extending credit facilities to the
PACBs for short-term/ medium-term agricultural purposes. Depending upon the needs of the
farmers, the bank has been extending credit facilities through the above channel for the allied
activities of farmers like purchasing milk animals, sheep rearing, poultry farming, bullock carts
and sericulture at lesser interest rate.
YEAR AWARDS
1985 – 86 THIRD PRICE FOR OVERALL PERFORMANCE
1986 – 87 SECOND PRICE FOR OVERALL PERFORMANCE
1987 – 88 THIRD PRICE FOR OVERALL PERFORMANCE
1989 – 90 Special award for outstanding performance under “SOCIAL GOALS
DEVELOPMENT “
1990 – 91 SECOND PRICE FOR OVERALL PERFORMANCE
1991 – 92 FIRST PRICE FOR OVERALL PERFORMANCE
1992 – 93 Special award for outstanding performance under “SOCIAL GOALS
DEVELOPMENT “
1993 – 94 Special award for outstanding performance under “OPERATIONAL
EFFICIENCY“
1995 – 96 FIRST PRICE FOR OVERALL PERFORMANCE
1996 – 97 FIRST PRICE FOR OVERALL PERFORMANCE
2000 – 01 FIRST PRICE FOR OVERALL PERFORMANCE
2001 – 02 SECOND PRICE FOR OVERALL PERFORMANCE
2003 – 04 SPECIAL AWARD FOR ‘AIMAS ‘
2004 – 05 SECOND PRICE FOR OVERALL PERFORMANCE
2005 – 06 SECOND PRICE FOR OVERALL PERFORMANCE
2006 – 07 FIRST PRICE FOR OVERALL PERFORMANCE
2007 – 08 FIRST PRICE FOR OVERALL PERFORMANCE
2008 – 09 FIRST PRICE FOR OVERALL PERFORMANCE
2009 – 10 FIRST PRICE FOR OVERALL PERFORMANCE
2010 – 11 FIRST PRICE FOR OVERALL PERFORMANCE
2011 – 12 FIRST PRICE FOR OVERALL PERFORMANCE
The NAFSCOB has selected this Bank and Awarded SPECIAL PRIZE for Best
Performance under “ALL INDIA MUTUAL ARRANGEMENT SCHEME” for 1996-97, 1997-
98 and 1999-2000. Best performance award under the above scheme was won by our Bank for
the year 2001-02, 2003-04 2004-05 also. NHFDC has awarded our bank NATIONAL AWARD
for our performance in the development of handicapped during 2005-06. For the year 2006-07
also bank has been awarded ‘BEST PERFORMANCE’ award by the government of India
II RESEARCH DESIGN
REVIEW OF LITERATURE
The review of past studies helps any research to define the scope, concept and working
definitions and also the formulation of imperial models. Thus it enhances the knowledge of the
researcher and makes his effort highly productive. Hence a brief review of literature related to
the subject of the present study is presented in this chapter.
Dr. K. Thirupura sundhari (2002) the financial performance analysis is largely a study
of relationships among various financial factors. The analysis and interpretation of financial
performance is a method of measuring and comparing the financial performance of the firm
and it helps to bring change in the flaws and also forecast future earnings and ability to pay.
This helps in the improvement of the organization. But the time duration provided was not
sufficient enough to conduct depth study.
Leonard. A .Jackson & H.G. Parsa (2009) proposes that a firm can be assessed and
assigned a score based on its financial performance on predetermined financial criteria.
The aim of the project is to study the financial performance of the TNSC Bank.
The study gives an insight into the banks overall performance.
This study would be helpful for the bank to make some improvement and be more
innovative.
PRIMARY OBJECTIVE
To analyze the financial performance of TNSC Bank from 2006 to 2010 using
various tools of financial statement analysis.
SECONDARY OBJECTIVES
This research helps the TNSC Bank to understand the financial trends as well as areas of
the draft contribution to crisis. The bank can utilize data to improve and rework on their
means and methods of allocation of financial resources for smooth and efficient
performance.
The main objective of the current study is to understand and identify the financial
performance of TNSC Bank for the last five years i.e., 2005-10.
The analysis will be carried based on the financial tools like Ration analysis, comparative
financial statements, common-size Financial Statements and Trend Analysis.
The financial position of the company reveals the profitability and credit worthiness.
The theoretical background about any topic would not be useful for anyone unless it is
done practically.
So the important of any project is to gain practical exposure and proper insight on the
topic under study.
A study on financial performance of TNSC Bank.
Analysis and Interpretation through compilation of the account department and revenue
income and expenditure.
So as to afford full diagnosis of the profitability of the financial soundness of the
business.
SOURCES OF DATA
RESEARCH
RESEARCH DESIGN
The research design is the arrangement of condition for collection and analysis of
data in a summer which may result in an economy in procedure. It stands for collection of the
relevant data and the technique to be used in the analysis, keeping in view the objectives of the
research and the availability of time.
The study was made for the period of accounting year 20013-14 to 2016-17
Selective of appropriate method, the researcher should keep in view of the following factors:
The primary data were collected through personal interviews with managers, Supervisors and
holding discussion with all parties concerned of TNSC Bank.
TYPE OF PROJECT
DESCRIPTIVE RESEARCH
The research design undertaken for the study is ‘Descriptive research design’.
These designs are determined for some specific purpose.
The data from the report have been analyzed to evaluate the performance of the
bank. For analyzing the financial performance of Tamil Nadu State Apex Co-operative Bank, the
tools adopted are:
RATIO ANALYSIS
RATIO ANALYSIS
This is the ratio of total advances to total assets. This ratio indicates a bank’s
aggressiveness in lending which ultimately results in better profitability. Higher ratio
advances/deposit (assets) is preferred to lower one. Total advances also include receivables.
The value total asset is exchanging the revaluation of all the assets.
The advances to total asset ratio of TNSC bank has decreased from 51.06% during
2015-16 to 33.84% during 2016-17.
The cash position ratio is the most conservative liquidity ratio for judging the
financial stability of the company on a short-term basis. To calculate cash ratio, add the value
of the company’s cash and short-term marketable securities and to divide the total by current
liabilities. This ratio shows the ability of the company’s cash on hand to find short-term
liabilities. This ratio is also called “Absolute liquid ratio”.
INTERPRETATION
The cash position ratio has increased 1.14 from during 2015-16 to 2.87 during 2016-
17.
CURRENT RATIO
Current ratio brings out the relationship between current assets and current liabilities.
It is an indication of an industry’s ability to meet short-term debt obligations. The higher the
ratio, the more liquid the industry is. This ratio is also known as “Working Capital Ratio or
Liquidity Ratio or Cash ratio or Quick Ratio”. The ideal ratio is 2:1. It is calculated by dividing
the total of the current assets by total of the current liabilities.
INTERPRETATION
The current ratio of TNSC bank has decreased from 33.88 during 2015-16 to 18.90 in
2016-17.
The analysis of the quantum of debtors shows the type of credit policy either liberal
or stringent followed by the company.
INTERPRETATION
Net profit is the ratio of net profit to the loan & advances. It is expressed in
percentage. It is a measure of overall profitability and hence proprietors. This indicates the
capacity of the bank to face adverse economic conditions. Higher the ratio, higher is the
profitability.
The net profit ratio of TNSC bank has increased from 0.58 during 2015-16 to 0.78 in
2016-17.
This ratio is an excellent tool to find out the relationship between profit and reserves.
Profit generally is making of gain in business, activities for the n=benefit of the owners of the
business, in asset-based lending; a reserve is the difference between the value of the collateral
and the amount lent.
INTERPRETATION
The profit to reserve ratio of TNSC bank has decreased from 5.77% during 2015-16
to 5.60% in 2016-17.
The statutory reserve ratio is the savings of the bank which will be used for lending as loans
and advances. Higher the ratio, greater is the profit.
The statutory reserve ratio of TNSC bank has increased from 32.69% during 2015-16
to 32.96% during 2016-17.
INTERPRETATION
The total investment to total asset ratio of TNSC bank has increased by 0.9% from
21.90% during 2015-16 to 21.99% in 2016-17.
TURNOVER RATIO
Capital turnover ratio is used to calculate the rate of return on common equity and it
is a measure of how well a bank uses its equity to generate revenue. The higher the ratio is, the
more efficiency the bank is utilizing its capital. It is known as equity turnover.
INTERPRETATION
The capital turnover ratio of TNSC bank has fluctuated over the years from 7.16% in
2013-14 to 4.65% in 2016-17.
The overall profitability ratio of TNSC bank has decreased from 0.30% during 2015-
16 to 0.26 % in 2016-17.
TABLE SHOWING COMPARATIVE BALANCE SHEET AS ON 2012-13 & 2013-14
(Rs.in Crores)
(Rs. In Crores )
PARTICULARS 2014 2015 INCREASE/ INCREASE/
DECREASE DECREASE
(AMOUNT) (%)
ASSETS
CURRENT
ASSETS
Cash on hand & 2506.62 2059.28 (4.47) (17.84)
balances with
banks
Money at call 471.58 75.00 (3.96) (84.09)
Investments 2942.13 2831.04 (1.11) (3.77)
Advances 8440.29 80820.04 (3.58) (4.24)
Other assets 11.85 139.92 128.06 1080.07
TOTAL 14372.47 85925.25 114.94
CURRENT
ASSETS(A)
TOTAL FIXED 10.63 9.52 (1.10) (10.40)
ASSETS(B)
TOTAL 143763.1 85934.77 113.84
ASSETS =(A+B)
(Rs. In Crores )
ASSETS
CURRENT
ASSETS
Cash on hand & 2059.28 2451.76 392.48 19.05
balances with
banks
Money at call 75.00 1167.91 1.09 1457.22
Investments 2831.04 3154.46 23.42 11.42
Advances 80820.04 7353.07 (7.28) (9.01)
Other assets 139.92 94.75 45.17 32.28
TOTAL 85925.28 14221.95 454.88 1528.98
CURRENT
ASSETS(A)
TOTAL FIXED 9.52 9.68 0.54 1.61
ASSETS(B)
TOTAL 85934.8 14231.63 455.42 1530.59
ASSETS =(A+B)
(Rs. In Crores )
5.1 FINDINGS