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INTRODUCTION
Financial management is universal phenomenon. Management is the process involving
planning, directing, organizing, staffing and controlling human efforts, to achieve stated
objectives in organization.
Everyone should know the fundamental principles or proactive of Management with a
special emphasis to business enterprise
Management is an art of getting things down through or with the people in formally
organized groups. It is a task of planning, co-ordinating, controlling and motivating the
efforts for other towards a specific objective.
Finance is a blood of business. Financial management helps in achieving group goals. IT
reduces the cost and optimum utilization of funds and maximum results with the
minimum efforts.
In India the co-operative has started officially in the year 1904 when the government of
India passed the first co-operative act. The co-operative movement was introduced in
India with the main objective of making a break through in the provision of credit to the
poor classes.
Especially for the vast majority of agriculturists who were suffering under the heavy
weight of indebtedness. With the over whelming importance assigned to food production
in our successive five-yearplans, the planners and pioneers of our conviction that co-
operation is the most effective instrument for the economic growth and prosperity of our
nation.
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MEANING AND CONCEPT OF FINANCIAL ANALYSIS
The term Financial Analysis is also known as analysis and interpretation of financial
statements, refers of the process of determining financial strength and weakness of the
firm by establishing strategic relationship between the items of the balance sheet, profit
and loss account and other operative data.
Analyzing financial statements According to METCALF AND TITARD is a process
of evaluating the relationship between component parts of financial statements to obtain a
better understanding of a firms possessions and performance
In the words ofMYERS, financial statements analysis is largely a study of relationship
among the various financial factors in a unisons as disclosed by a single of statement and
a study of the trend of these factors as shown in a series of statements.
The purpose of financial analysis of to diagnose the information contain in financial
statements as to judge the profitability and financial soundness of the firms.
The analysis and interpretation of financial statements is essential to bring out the
mystery behind the figures in financial statements. Financial statement analysis is an
attempt to determine the significance and meaning to the financial statement data so that
forecast my be made of the future earnings, ability to pay interest and debt maturates
(Both current and long term) the profitability a sound dividend policy.
The term financial statement analysis includes both analyses and interpretation. A
distinction should, be made between the two terms.
While the term analysis is used to mean the simplification of financial data by
methodical classification of the data given in the financial statements, interpretation
means, explaining the meaning and significance of the data so simplified.
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NEED OF THE STUDY
The project work is done for analyzing the financial position of the AXIS Bank. The
analysis of the financial position gives a better picture of the financial position of theorganization in order to take better decisions. Financial management is very important for
both individuals and organizations because it deals with managing the funds. It guides a
company and individual to make optimum use of money to achieve maximum returns.
Financial analysis helps to an individual / organization to save more and thus invest more.
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SCOPE OF THE STUDY
The study is confined to evaluation of the last 6 years financial annual reports the first
being a part report as the AXIS Bank was established in the middle of the financial year.
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OBJECTIVES OF THE STUDY
The primary objective of this study is to analyses the financial performance of AXIS
Bank.The following are its subsidiary objectives.
1. To examine the liquidity and solvency position of the company over the period of
study.
2. To study the operational performance and efficiency of the company in terms of
utilization of funds and other financial resources.
3. To evaluate the profitability of the concern to know the reasons and factors
responsible for the losses and to study its way of profit allocation And lastly to draw
conclusions and offer suggestions
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RESEARCH METHODOLOGY
Data is mainly two types they are
Primary data
Secondary data
Primary data
It is the information collected directly. In the study, it was mainly interviews with
concerned officer and staffs individually or collectively. This study does not include any
primary data.
Secondary data
The secondary data was collected from already published sources such as
Pamphlets. Annual reports and internal records. The data includes:
1. Collection of required data from annual reports of The AXIS BANK,2. Reference from text books and journals relating to financial management and articles
published in business dairies like the Economic times, business line etc.,
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LIMITATIONS OF THE STUDY
1 The study is mainly based on the secondary and no primary data was used.
2 While computing ratios, averages and percentages the figures are appropriated twodecimal places. Therefore sometimes the total may not exactly tally.
3 Only comparative, common-size trend and ratios analysis has been taken for the
study as a tool of financial and no other techniques is used.
4 The study is restricted to financial position of the AXIS Bank.
5 The study is mainly based restricted to only five years.
6. Lack of sufficient literature on the subject and also the regional urban AXIS Banks.
7. Only monetary values are considered while studying the projects.
8. The study was conducted only for a limited period of 45 days.
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COMPANY PROFILE
Axis Bank India, the first bank to begin operations as new private banks in 1994 after the
Government of India allowed new private banks to be established. Axis Bank was jointly
promoted by the Administrator of the specified undertaking of the
Unit Trust of India (UTI-I)
Life Insurance Corporation of India (LIC)
General Insurance Corporation Ltd.
Also with associates viz. National Insurance Company Ltd., The New India Assurance
Company, The Oriental Insurance Corporation and United Insurance Company Ltd. Axis
Bank in India today is capitalized with Rs. 43,283.77 Crores. It has more than
1281 branch offices and Extension Counters in the country with over 6270 Axis Bank
ATM proving to be one of the largest ATM networks in the country . This is thefirst bank
in India to offer the AT-PAR Cheque facility, without any charges, to all its Savings Bank
customers in all the places across the country where it has presence. With the AT PAR
cheque facility, customers can make cheque payments to any beneficiary at any of its
existence place. The ceiling per instrument is Rs. 50,000/-.The latest offerings of the bank
along with Dollar variant is the Euro and Pound Sterling variants of the InternationalTravel Currency Card. The Travel Currency Card is a signature based pre-paid travel
card which enables travelers global access to their money in local currency of the visiting
country in a safe and convenient way. The Bank has strengths in both retail and corporate
banking and is committed to adopting the best industry practices internationally in order
to achieve excellence.
It is has a diversified presence across business and product lines with corporateAdvances
constituting ~57% of its total loan book, retail ~20%, SME ~14% and agriculture ~9%, as
on December 31, 2010.
The bank was formerly known as UTI Bank; it changed its name to Axis Bank in July 20
07.
The bank has overseas offices at Singapore, Dubai and Hong Kong and a representative o
ffice in
Shanghai.
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EVOLUTION
UTI was established in 1964 by an Act of Parliament; neither did the Government
of India own it nor contributes any capital. The RBI was asked to contribute one-half of
its initial capital of Rs 5 crore, and given the mandate of running the UTI in the interest of
the unit-holders. The State Bank of India and the Life Insurance Corporation contributed
15 per cent of the capital each, and the rest was contributed by scheduled commercial
banks which were not nationalized then. This kind of structure for a unit trust is not found
anywhere else in the world. Again, unlike other unit trusts and mutual funds, the UTI was
not created to earn profits. In the course of nearly four decades of its existence, it (the
UTI) has succeeded phenomenally in achieving its objective and has the largest share
anywhere in the world of the domestic mutual fund industry.'' The emergence of
a "foreign expert" during the setting up of the UTI makes an interesting story. The
announcement by the then Finance Minister that the Government of India was
contemplating the establishment of a unit trust caught the eye of Mr. George Woods,
the then President of the World Bank. Mr. Woods took a great deal of interest in
the Indian financial system, as he was one of the principal architects of the ICICI, in
which his bank, First Boston Corporation Bank, had a sizeable shareholding. Mr. Woods
offered, through Mr. B.K. Nehru, who was India's Executive Director on the World Bank,
the services of an expert. The Centre jumped at the offer, and asked the RBI to hold up
the finalization of the unit trust proposals till the expert visited India. The only point Mr.
Sullivan made was that the provision to limit the ownership of units to individuals might
result in unnecessarily restricting the market for units. While making this point, he had in
mind the practice in the US, where small pension funds are an important class of
customers for the unit trusts. The Centre accepted the foreign expert's suggestion, and the
necessary amendments were made in the draft Bill. Thus, began corporate investment in
the UTI, which received a boost from the tax concession given by the government in the
1990-91 Budget. According to this concession, the dividends received by a company from
investments in other companies, including the UTI, were completely exempt from
corporate income tax, and provided the dividends declared by the investing company
were higher than the dividends received. The result was a phenomenal increase in
corporate investment which accounted for 57 per cent ofthe total capital under US-64
scheme. Because of high liquidity the corporate sector used the UTI to park its liquid
funds. This added to the volatility of the UTI funds.
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The corporate lobby which perhaps subtly opposed the establishment of the UTI in the
public sector made use of it for its own benefits later. The Government-RBI power
game started with the finalization of the UTI charter itself. The RBI draft of the UTI
charter stipulated that the Chairman will be nominated by it, and one more
nominee would be on the Board of Trustees. While finalizing the draft Bill, the Centre
changed this stipulation. The Chairman was to be nominated by the Government, albeit in
consultation with RBI. Although the appointment was to be made in consultation with the
Reserve Bank, the Government could appoint a person of its choice as Chairman even if
the Bank did not approve of him.
Board of Directors
The members of the Board are
Dr. Adarsh Kishore Chairman
Smt. Shikha Sharma Managing Director & CEO
Shri S. K. Chakrabarti Deputy Managing Director
Dr. R.H. Patil Director
Smt. Rama Bijapurkar Director
Shri R.B.L. Vaish Director
Shri M.V. Subbiah Director
Shri K. N. Prithviraj DirectorShri V. R. Kaundinya Director
Shri S. B. Mathur Director
Shri Prasad R. Menon Director
Shri R. N. Bhattacharyya Director
Shri Samir K Barua Director
MISSION AND VALUES
AXIS VALUES
Customer Service and Product Innovation tuned to diverse needs of
individual and corporate clientele. Continuous technology up gradation while maintaining human values.
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Progressive globalization and achieving international standards.
Efficiency and effectiveness built on ethical practices.
CORE VALUES
Customer Satisfaction through
Providing quality service effectively and efficiently
"Smile, it enhances your face value" is a service quality stressed
on
Periodic Customer Service Audits
Maximization of Stakeholder value
Success through Teamwork, Integrity and People
MARKETING OBJECTIVES
Axis Bank wants to achieve following marketing objectives by the end of the year 2011.
To get the market capitalization 500 Crore
To get the 200 Crore retail investment
To get 125 Crore Corporate investments
To get the 175 Crore Capital investments
AWARDS & RECOGNITION
1. Best Bank - CNBC- TV18 Indias Best Bank and Financial Institution Awards
2012
2. Consistent Performer - Indias Best Banks 2012 survey by Business Today &
KPMG
3. Fastest Growing Large Bank - Dun & Bradstreet-Polaris Financial Technology
Banking Awards 2012
4. Fastest Growing Large Bank - Businessworld Best Banks Survey 2012
5. Best Bank - Runner Up - Outlook Money Awards 2012
6. Deal Maker of the Year in Rupee Bonds Business world Magna Awards -
India's Best Deal Makers 2012
7. India Bond House of the year - IFR ASIA - Country Awards 2012
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8. Best Domestic Bond House - The Asset Triple A Country Awards 2012 - Our
Bank has been honored with this award for the Third year in a row.
9. The Best Emerging Bullion Dealing Bank of the year 2011-12 at 9th India
International Gold Convention
10. Best Acquiring Institution in South Asia- Visa LEADER Award at Visas 2012
APCEMEA Security,Summit, Bali.
11. Bank of the Year India The Banker Awards 2011
12. Best Bank in the Private Sector - NDTV Profit Business Leadership Awards 2011
13. Best Bank - Outlook Money Awards 2011
14. The Best Domestic Bank India - The Asset Triple A Country Awards 2011
15. Fastest Growing Bank - Bloomberg UTV Financial Leadership Awards 2012
16. Most Productive Private Sector Bank- FIBAC 2011 Banking Awards
17. 3rd Strongest Bank in Asia -Pacific Region by Asian Banker
18. Brand Excellence Award- 2011(BFSI Sector) - Star News
19. Most Preferred Bank amongst retail consumers - CLSA survey on personal
banking trends
20. Best Bond House India - 2011 by Finance Asia
21. Best Risk Master award - (Private Sector Category) FIBAC 2011 Banking
Awards
MISSION
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World Class Indian Bank. Benchmarking against international standards. To build sound
customer franchises across distinct businesses. Best practices in terms of product
offerings, technology, service levels, risk management and audit & compliance
VISION
The Axis Bank is committed to maintain the highest level of ethical standards,
professional integrity and regulatory compliance. Axis Banks business philosophy is
based on four core values such as:-
1. Operational excellence.
2. Customer Focus.
3. Product leadership.
4. People.
INDUSTRY PROFILE
HDFC
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The Housing Development Finance Corporation Limited (HDFC) was amongst the first
to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank
in the private sector, as part of the RBI's liberalization of the Indian Banking Industry in
1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited',
with its registered office in Mumbai, India. HDFC Bank commenced operations as a
Scheduled Commercial Bank in January 1995.
BUSINESS SUMMARY
HDFC Bank Limited offers a range of commercial and transactional banking services,
and treasury products to wholesale and retail customers. It operates in three segments:
Retail Banking,
Wholesale Banking,
Treasury Services.
WHOLE SALE BANKING SERVICES
The Bank's target market ranges from large, blue-chip manufacturing companies in the
Indian corporate to small & mid-sized corporate and agri-based businesses. For these
customers, the Bank provides a wide range of commercial and transactional banking
services, including
Working capital finance,
Trade services,
Transactional services,
Cash management,
RETAIL BANKING SERVICES
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The objective of the Retail Bank is to provide its target market customers a full range of
financial products and banking services, giving the customer a one-stop window for all
his/her banking requirements. The products are backed by world-class service and
delivered to the customers through the growing branch network, as well as through
alternative delivery channels like
ATMs,
Phone Banking,
Net Banking,
Mobile Banking.
TREASURY
Within this business, the bank has three main product areas
Foreign Exchange and Derivatives,
Local Currency Money Market & Debt Securities,
Equities.
ICICI
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ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was
reduced to 46%through a public offering of shares in India in fiscal 1998, an equity
offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition
of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary
market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was
formed in 1955 at the initiative of the World Bank, the Government of India and
representatives of Indian industry. The principal objective was to create a development
financial institution for providing medium-term and long-term project financing to Indian
businesses. In the
1990s, ICICI transformed its business from a development financial institution offering
only project finance to a diversified financial services group offering a wide variety of
products and services, both directly and through a number of subsidiaries and affiliates
like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or
financial institution from non-Japan Asia to be listed on the NYSE. After consideration of
various corporate structuring alternatives in the context of the emerging competitive
scenario in the Indian banking industry, and the move towards universal banking, the
managements of ICICI and ICICI Bank formed the view that the merger of ICICI with
ICICI Bank would be the optimal strategic alternative for both entities, and would create
the optimal legal structure for the ICICI group's universal banking strategy. The merger
would enhance value for ICICI shareholders through the merged entity's access to low-
cost deposits, greater opportunities for earning fee-based income and the ability to
participate in the payments system and provide transaction-banking services. The merger
would enhance value for ICICI Bank shareholders through a large capital base and scale
of operations, seamless access to ICICI's strong corporate relationships built up over five
decades, entry into new business segments, higher market share in various business
segments, particularly fee-based services, and access to the vast talent pool of ICICI
and its subsidiaries. In October 2001, the Boards of Directors of ICICI and ICICI Bank
approved the merger of ICICI and two of its wholly-owned retail finance subsidiaries,
ICICI Personal Financial Services Limited and ICICI Capital Services Limited, with
ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank in
January2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the
High Court of Judicature at Mumbai and the Reserve Bank of India in April
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2002. Consequent to the merger, the ICICI group's financing and banking operations,
both wholesale and retail, have been integrated in a single entity.
Performance Review Quarter and year ended March 31, 2010
35% year-on-year increase in standalone profit after tax to Rs. 1,006 crore for the
quarter ended March 31, 2010 from
Rs. 744 crore for the quarter ended March 31, 2009
Highest ever consolidated profit after tax of Rs. 4,670 crore for the year ended
March 31, 2010; 31% increase from Rs.
3,577 crore for the year ended March 31, 2009
Current and savings account (CASA) ratio increased to 41.7% at March 31, 2010
from 28.7% at March 31, 2009
Strong capital adequacy ratio of 19.4% and Tier-1 capital adequacy of 14.0%
Dividend of Rs. 12 per share proposed
SBI
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The origin of the State Bank of India goes back to the first decade of the nineteenth
century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806.Three
years later the bank received its charter and was re-designed as the Bank of Bengal (2
January 1809). A unique institution, it was the first joint-stock bank of British India
sponsored by the Government ofBengal. The Bank of Bombay (15 April 1840) and the
Bank of Madras (1 July 1843) followed the Bank of Bengal. These three banks remained
at the apex of modern banking in India till their amalgamation as the Imperial Bank of
India on 27 January 1921.Primarily Anglo-Indian creations, the three presidency banks
came into existence either as a result of the compulsions of imperial finance or by the felt
needs of local European commerce and were not imposed from outside in an arbitrary
manner to modernize India's economy. Their evolution was, however, shaped by ideas
culled from similar developments in Europe and England, and was influenced by changes
occurring in the structure of both the local trading environment and those in the relations
of the Indian economy to the economy of Europe and the global economic framework.
BUSINESS SUMMARY
The business of the banks was initially confined to discounting of bills of exchange or
other negotiable private securities, keeping cash accounts and receiving deposits and
issuing and circulating cash notes. Loans were restricted to Rs. one lakh and the period
of accommodation confined to three months only. The security for such loans was public
securities, commonly called Company's Paper, bullion, treasure, plate, jewels, or goods
'not of a perishable nature' and no interest could be charged beyond a rate of twelve per
cent. Loans against goods like opium, indigo, salt woolens, cotton, cotton piece goods,
mule twist and silk goods were also granted but such finance by way of cash credits
gained momentum only from the third decade of the nineteenth century.
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All commodities, including tea, sugar and jute, which began to be financed later, were
either pledged or hypothecated to the bank. Demand promissory notes were signed by the
borrower in favor of the guarantor, which was in turn endorsed to the bank. Lending
against shares of the banks or on the mortgage of houses, land or other real property was,
however, forbidden. Indians were the principal borrowers against deposit of Company's
paper, while the business of discounts on private as well as salary bills was almost the
exclusive monopoly of individuals Europeans and their partnership firms. But the main
function of the three banks, as far as the government was concerned, was to help the latter
raise loans from time to time and also provide a degree of stability to the prices of
government securities.
SERVICES PROVIDED
PERSONAL BANKING:
AGRICULTURAL BANKING
CORPORATE BANKING
NRI BANKING
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INDIAN OVERSEAS BANK
Indian Overseas Bank (IOB) was founded on February 10, 1937 by Shri.M.Ct.M.
Chidambaram Chettyar. IOB had the unique distinction of commencing business on the
inaugural day itself in th re e br an ch es si mu lt an eo us ly - at Ka ra ik udi an d
C he nn ai i n I nd i a an d Ra ng oo n in Bu rm a (presently Myanmar) followed by a
branch in Penang.
Indian Overseas Bank was the first Bank to venture into consumer credit. It introduced
the popular Personal Loan scheme. In 1964, the Bank made a beginning in
computerization in the areas of inter-branch reconciliation and provident fund accounts.
IOB was one of the 14 major banks that were nationalized in 1969. On the eve of
Nationalization in 1969, IOB had 195branches in India with aggregate deposits of Rs
67.70 crores and Advances of Rs 44.90 crores. In1977, IOB opened its branch in Seoul
and the Bank opened a Foreign Currency Banking Unit in the free trade zone in Colombo
in 1979.As of March 2003, IOB had 1427 branches in India and 6 branches overseas.
Besides the Bank has a network of over 240 ATMs and 243 Extension Counters. IOB has
specialized branches to cater to the exclusive needs of Commercial & Industrial credit,
Industrial finance, Small Scale industries, hi-tech agriculture and foreign exchange.
SERVICES PROVIDED
Saving Bank Deposits
No Frills SB Accounts
Current Account
Fixed Deposit
Reinvestment Deposit
Recurring Deposit Account
Annuity Deposit Plan
Multiple Investment Scheme
Cumulative Benefit Deposit
Multiple Deposit Account
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7P FRAME WORK IN AXIS BANK
Once the marketing strategy is developed, there is a "Seven P Formula" that should be
used to continually evaluate and reevaluate your business activities. These seven are:
Product,
Price
Promotion
Place
Process
Positioning
People, as products, markets, customers and needs change rapidly, company mustcontinually revisit these seven Ps to make sure you're on track and achieving the
maximum results possible for you in today's marketplace.
PRODUCT
To begin with, develop the habit of looking at your product as though you were an
outside marketing consultant brought in to help your company decide whether or not it's
in the right business at this time. Ask critical questions such as, "Is the current product or
service, or mix of products and services, appropriate and suitable for the market and the
customers of today?"
Develop a habit of assessing your business honestly and asking,
Are these the right products or services for our customers today?
Compared to your competitors, is your product or service superior in some
significant way to anything else available? If so, what is it? If not, could
you develop an area of superiority? Should you be offering this product or
service at all in the current market place?
Product variety, quality and its features.
Is there a market for the service on offer?
Is the market growing or shrinking?
Is the service new or established?
The competition prevailing in the market for the service on offer?
The USP of the product.
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PRICES
The second P in the formula is price. Develop the habit of continually examining and
reexamining the prices of the products and services you sell to make sure they're still
appropriate to the realities of the current market. Sometimes you need to lower your
prices. At other times, it may be appropriate to raise your prices. Many companies have
found that the profitability of certain products or services doesn't justify the amount of
effort and resources that go into producing them. By raising their prices, they may lose
a percentage of their customers, but the remaining percentage generates a profit on every
sale. Could this be appropriate for you? Sometimes you need to change your terms and
conditions of sale. Sometimes, by spreading your price over a series of months or years,
you can sell far more than you are today, and the interest you can charge will more
than make up for the delay in cash receipts. Sometimes you can combine products and
services together with special offers and special promotions. Sometimes you can include
free additional items that cost you very little to produce but make your prices appear far
more attractive to your customers. In business, as in nature, whenever you experience
resistance or frustration in any part of your sales or marketing activities, be open to
revisiting that area. Be open to the possibility that your current pricing structure is not
ideal for the current market. Be open to the need to revise your prices, if necessary, to
remain competitive, to survive and thrive in a fast-changing market place.
AXIS bank has developed innovative strategies against its competitors with respect to
pricing by use of technology. The use of technology is the strategic differentiator for
AXIS bank that helps in cost minimization and creating efficiency for the customer.
The creation of centralized processing system linking all its branches has been a major
strategic move in this regard.
The pricing mechanism and features of various Axis products are as follows: Home
Loans:
Floating rates:
For loan of up to five years for amounts between Rs one lakh and Rs 50
lakh is at9.25 per cent (9 per cent).
The rate for loans of 5 years and above up to 10 years is now at 9.75 percent (9.50 per cent).
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The interest rate for above ten years now stands at 10.25 per cent (10 per
cent)
Account Statements Free
Phone banking and Net banking Free
PROMOTION
The third habit in marketing and sales is to think in terms of promotion all the time.
Promotion includes all the ways you tell your customers about your products or services
and how you then market and sell to them. Small changes in the way you promote
and sell your products can lead to dramatic changes in your results. Even small changes in
your advertising can lead immediately to higher sales.
AXIS bank has devised an aggressive promotional strategy through its diversified
distribution mix which includes tied agencies and alternate channels like banks, brokers,
telemarketing, direct sales force, internet advertizing .
Some of the promotional activities undertaken are
Cross Selling exercises
Organizing school level painting competitions in order to create awareness
about the environmental concerns and the wild life to promote kids
advantage account.
Wheels of fortune - This promo are targeted at all those customers who
avail a personal loan, car or a two wheeler loan. There will be lucky draw
at the end of the promo and the winners would get exotic prizes.
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Description of Charges Regular Savings Account
Minimum Average Quarterly
Balance
Rs 5000 (urban),
Rs 2500(Semi Urban),
Rs 1000 (Rural branch),
Rs 500 (student account)
Charges on non maintenance thereof Rs750 per quarter(urban & semi urban)
Rs 500 (Rural branch),
Rs 250 (student account)
Cheque Book, Pass Book Issuance Free
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Personalized promos by sending mailers about various products on offer to
all those who come in contact during the mass promotion strategies.
The promotional strategies are carried out with an objective of positioning AXIS bank as
a one stop financial super market. The focus of the promotions are not just confined to
acquisition of new products but also extends to creating product awareness, enhancing
usage, and also provide value add to the customers for their faith and loyalty. These
promotions are scientifically designed based on data analysis and data mining in order to
have maximum impact on the target audience.
PLACE
The fourth P in the marketing mix is the place where your product or service is actually
sold. You can sell your product in many different places. Some companies use direct
selling, sending their salespeople out to personally meet and talk with the prospect. Some
sell by telemarketing. Some sell through catalogs or mail order. Many companies use a
combination of one or more of these methods. It refers to those activities of the company
that makes the product available to target consumers. It includes geographic spread,
distribution channels, dealer ships that facilitate network establishment. Axis bank is
widely spread in India and its core banking operations has huge network
1281 branches and extension counters foreign offices in Singapore, Hong
Kong, Shanghai and Dubai
6270 ATMs reaches out to 34 states and union territories across the country
AXIS bank owns a wholly owned distribution channel with dedicated workforce,
thereby lowering the operating costs. It uses its network base to good effect to sell
customized products.
PROCESS
The fifth element in the marketing mix is the process. Develop the habit of standing back
and looking at every visual element in the process or service through the eyes of a critical
prospect. Remember, people from their first impression about you within the first 30
seconds of seeing you or some element of your company. Small improvements in the
process or external appearance of your product or service can often lead to completely
different reactions from your customers. With regard to the process of your
company, your product or service, you should think in terms of everything that the
customer sees from the first moment of contact with your company all the way throughthe purchasing process.
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Process refers to the way your product or service appears from the outside. Packaging
refers to your people and how they dress and groom. It refers to your offices, your waiting
rooms, your brochures, your correspondence and every single visual element about your
company. Everything counts. Everything helps or hurts. Everything affects your
customer's confidence about dealing with you.
POSITIONING
The next P is positioning, the habit of thinking continually about how you are positioned
in the hearts and minds of your customers.
How do people think and talk about you when you're not present?
How do people think and talk about your company?
What positioning do you have in your market, in terms of the specific
words people use when they describe you and your offerings to others?
AXIS Bank has positioned its branches in all the strategic position so that it is easily
accessible to maximum customer. It has also come up with some phone banking
centre and centralized collection and payment hub.
CENTRALISED PHONE BANKING CENTRE
The Banks Centralized Phone Banking Centre provides customers across the country
Access to the Bank over the phone, handling multiple queries in about 7000 calls per day.
CENTRALISED COLLECTION AND PAYMENT HUB
The Banks Centralized Collection and Payment Hub (CCPH) manages the entire
collection and payment activity under the Banks Cash Management Services (CMS)
across the country, handling on an average about Rs.5000 crores per month on the
collection front and aboutRs.1500 crores per month on the payment front.
PEOPLE
The final P of the marketing mix is people. Develop the habit of thinking in terms of the
people inside and outside of your business who are responsible for every element of your
sales and marketing strategy and activities. It's amazing how many entrepreneurs and
businesspeople will work extremely hard to think through every element of the marketing
strategy and the marketing mix, and then pay little attention to the fact that every single
decision and policy has to be carried out by a specific person, in a specific way. Your
ability to select, recruit, hire and retain the proper people, with the skills and abilities to
do the job you need to have done, is more important than everything else put together. An
essential ingredient to any service provision is the use of appropriate staff and people.
Recruiting the right staff and training them appropriately in the delivery of service is
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essential if the organization has to obtain competitive advantage. AXIS bank values its
human resources very highly and is on a constant endeavor to continuously develop its
human resources by laying strong emphasis on training development. It possesses a
highly motivated team of professionals and has the lowest employee turnover rate in the
industry.
PROMOTIONAL STRATERGIES
In early 1950's most of the markets were choking with surplus products on offer, defying
the theory "the best quality will always sell". The emergence of Branding as a value in
offering has kept many organizations leaders, and in survival. Branding is termed as a
part of offering, created in the mind of customer and consumer of superior values that he
or she perceives and ready to pay for. The brand can be associated with superior product,
superior services, and superior sales after services, or easy access. In today's era with
increasing competition, is that not important enough to revisit Brand as a marketing
offering (Product or Service).
BRAND NAME
UTI has officially announced the change of its name to Axis Bank. The
awareness campaign titled UTI Bank is now Axis Bank; everything is the same except
the name, has been created by O&M and is the brainchild of Sumanto Chattopadhyay.
The decision to re-brand the bank emanated from the need to move out of a scenario of
brand confusion that is created by several shareholder-unrelated entities using the
UTI brand. On the creative point of view, the change of name from UTI Bank to Axis
Bank is precisely just a name change. Everything else about the brand remains the same.
Axis is a strong name with an international aura to it. It is very much in keeping with
UTIs success story in the private banking arena.
LOGO DESIGN
The logo design of Axis Bank is based on the letter A. It is a contemporary, universal
and solid design that retains the burgundy color of the original UTI logo as a link to its
heritage
MARKETING INITIATIVES
On the marketing initiatives, a multimedia campaign was unfolded on August 1 that will
go on for the next few weeks. It seeks to reassure customers that the change of name will
in no way affect the services offered by the bank. On the thought process the
creative platform adopted for the name change is based primarily on twins -- siblings
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whose names are different, but are identical in every other way. This campaign will run
on
Television
Outdoor
Radio and other 360-degree media.
Some interesting innovations are planned in the print medium. On radio, the name change
is being expressed in a slightly different manner, in keeping with the nature of the
medium.
Growth Prospects of Axis
Over the last five years, the CAGR for loan growth for the banking industry has been 25-26
per cent; for Axis Bank it has been above 40 per cent.
Nonetheless, the bank is still expected to grow its loan portfolio at 1.5-1.7x the industry
average.
In FY09 its advances grew at the rate of 37.5 per cent.
In FY10 they are expected to grow at the rate of 27-28 per cent and in FY11 at 25 per
cent.
For the banking industry as a whole, the loan book is expected to grow at 18 per cent in
FY10 and 16 per cent in FY11.
Thus, Axis Banks fast pace of growth is expected to sustain over the next couple of years.
Marketing Objectives
Axis Bank wants to achieve following marketing objectives by the end of the year 2011.
To get the market capitalization 500 Crore
To get the 200 Crore retail investment
To get 125 Crore Corporate investments
To get the 175 Crore Capital investments
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FINANCIAL STATEMENT ANALYSIS
FINANCIAL ANALYSIS
Analysis is the process of critically examining in detail information given the financial
statement. For the purpose of analysis individual items are studied their relationship with
other related figures established, the data is sometime rearranged to have better
understanding of the information with the help of different techniques or tools for the
purpose. Analyzing financial statements is a process of evaluation relationship between
component parts of financial statement to obtain better understanding of firms position
and performance.
INTERPRETATION
Analysis and interpretation and closely related interpretation is not possible without
analysis and without interpretation analysis has no value.
Interpretation is that drawing of inference and stating what the figures in the financial
statements really mean. Interpreter must have experience.Understanding and intelligence
to draw correct conclusion for the analysis data.
USES OF FINANCIAL ANALYSIS
Financial analysis is helpful in assessing the financial position and profitability of a
concern this is done through compares on by ratios for the same concern over a period of
years or for one concern against the predetermined standards or for one department of a
concern against other department of the same concern.
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OBJECTIVE OF FINANCIAL ANALYSIS
Accounting ratios calculated for a number of years of the trend of the change of position
the ascertainment of trend helps in making estimate for the future. The main objectives of
financial analysis are to assess.
The present and future earning capacity of the concern.
The operational efficiency of the concern as a whole and of its various parts.
The short term and long term solvency of the concern for the benefit of the debenture
holders and trade creditors.
To compare the performance of the company with that of another company or of the
same company with previous performance.
The financial stability of the company.
TYPES OF THE FINANCIAL ANALYSIS MAY BE:1. The nature of the analyst and the material used by him.
2. The objective of analysis and
3. The modus operandi of the analysis
1. According to the nature of the analyst and the material used by him
INTERNAL ANALYSIS:
The people who have assessed to the books of accounts make the internal analysis. They
are members of the analysis. Analysis of the financial statement or other financial data for
managerial is the internal type of analysis. The internal analyst can give more reliable
result than the external analyst because every type of analysis. The internal type of
analysis can give more reliable result than the external analyst because every type of
information is at his disposal.
EXETERNAL ANALYSIS:
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It is made by those persons who arent connected with the enterprises they dont have the
assess to the detailed record of the company and have to depend mostly on published
statements such analysis is made by investors, credit agencies, government agencies and
research scholars.
2. According To the Object Of The Analysis:
Long Term Analysis:
The analysis is made in order to study the long-term financial stability, solvency,
profitability and earning capacity of a Company. The purpose of making such type of
analysis is to know whether in the long run the company will be able to earn a minimum
amount, which will be sufficient to maintain a reasonable rate of return of the investment
of the Company and to meet it cot of capital. This type of analysis help the long term
financial planning which essential for the continued success of the company.
B) Short Term Analysis:
This is made to determine the short-term solvency and liquidity of the company. The
purpose of this analysis is to know whether in the short run a company will have adequate
funds readily available to meet its short-term requirements and sufficient borrowing
capacity to meet contingencies in the near future. This analysis is made with reference to
items of current assets and current liabilities (working capital analysis) to have fairly
sufficient knowledge about the companys position which may be helpful short-term
financial planning.
3) According to the modus operand of the analysis:
A) HORIZONTAL ANALYSIS:
This analysis is made to review and analysis financial statements of a number of
years and therefore based on financial data taken from several years. This is very
useful for long-term trend analysis and planning.
B) VERTICAL ANALYSIS:
This analysis is made to review and analyze the financial statement of one
particular year only.
Procedure of Financial statement analysis:
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There are three steps in the financial statement.
1) Selection:
Selection of Information (data) relevant to the purpose of analysis of financial
statement.2) Classification:
Methodical classification of the data.
3) Interpretation:
Drawing of Internees and conclusions.
Methods or Devices of Financial Analysis:
The analysis and interpretation of financial statement is used to determine the financial
position and results of operations as well. A number of Methods or devices are used to
study the relationship between different statements. An effort is made to use those
devices which clearly analyze the position of the enterprise.
The following methods of analysis are generally used.
1) Comparative statements.
2) Trend analysis
3) Common-size statements4) Funds flow analysis
5) Cash flow analysis
6) Ratio analysis
7) Cost-Volume-profit analysis
From the above methods the Comparative Statements, Trend analysis, Ratio
Analysis is discussed in the chapter.
As this project work deals with the study of the following method, these methods or
devices of financial analysis are discussed.
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I. Comparative Balance Sheet:
The Comparative Balance Sheet analysis is the study of the trends of same items, groups
of items and computed items in two or more Balance Sheets of the same business on
different date. The change in the periodic Balance Sheet items reflect the conduct of
business. The increase decrease in figures helps in forming opinion about the progress of
an enterprise.
Interpretation of Comparative Balance Sheet:
While interpreting comparative Balance Sheet, the interpreter is expected to study the
following aspects.
1. Current Financial and Liquidity position.
2. Long-Term Financial position, and
3. Profitability of the concern.
II. Trend Analysis:
The trend analysis is a technique of studying several financial statements over a series of
years. In this analysis the trend percentage are calclated for each item by taking the figure
of that item for the base year taken as 100. Generally the first year is taken as a base year .
the analyst is able to see the trend of figures, whether moving upward or downward.
The Financial statement may be assigned by Computing Trend Series of information.
This method determines the direction upward or downward and involves the computation
of the percentage relationship in each statement item bears to same item in the base year
(Base Year = 100). Generally, First year is taken as base year and trend ratios for another
year are calculated based on base year. The method of trend analysis is useful analytical
device since substitution of percentages for large amounts; the brevity and readability are
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achieved. However, trend analysis is not calculated for all of these items in financial
statement. They are usually calculated for major items since the purpose is import and
changes.
III. Ratio Analysis:
Ratio analysis is a widely used tool for Financial Analysis. It is defined as the systemic
uses of ratio to interpret the Financial Statements so that the strengths and weakness of a
Firm as well its Historical performance and current Financial condition can be
determined.
The Ratio Analysis is one of the most powerful tools of Financial Analysis. It is process
of establishing and interpreting various Ratios. It is with the help of ratios that the
Financial Statements can be analyzed more clearly and decisions.
I. Interpretation of the Ratios:
The interpretations of Ratio is an important factor. The inherent limitations of Ratio
Analysis should be kept in mind while interpreting them. The interpretation of Ratios can
be made in the following ways.
1. Single Absolute Ratio:
Generally speaking one amount draw conclusions when a single is considered in
isolation. But single ratios may be studied in relation to certain thumb-rules, which are
based upon well proven conventions.
2. Group of Ratios:
Ratios can be interpreted by calculating a group of related ratio. A single by other related
additional ratios becomes more understandable and meaningful.
3. Historical Comparison:
One of the easiest and most popular ways of evaluating the performance is to
compare its present ratio with the past ratios is called comparison overtime. It gives an
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indication of the direction of the change and reflect whether the firms performance and
Financial position has improved detrained or remained constant over as period of time.
II. LIMITATIONS OF RATIO ANALYSIS
1. Limited use of a single ratio.
2. Lack of adequate standards.
3. Inherent limitations of accounting.
4. Change of accounting procedure.
5. Window dressing.
6. Personal bias.7. Un comparable.
8. Absolute figures distinctive.
9. Price level changes.
10. Ratios no substitutes.
4. Projected Ratios:
Ratios can also be calculated for future standards based upon the projected
Financial statements. These future ratios are compared with the actual ratios to find
variance, if any such variance helping interpreting and taking corrective actions.
5. Inter-Firm Comparison:
Ratios of one firm can also be compared with the ratios some other firms in the
industry at the same point of time. This helps in evaluating relative financial position and
the performance of the firm.
III. Uses and Significance:
a) Managerial uses of ratio analysis.
Helps in Decision making
Helps in Financial forecasting and planning.
Helps in communicating.
Helps in Co-ordinating.
b) Helps in control
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c) Utility to shareholders
d) Utility to Creditors
e) Utility to employees
f) Utility to Government.
Can be made accurately. A financial ratio is the relationship between to accounting
figures expressed mathematically. A ratio can be expressed as percentage by simply
multiplying the ratio with 100.
IV. Nature of Ratio Analysis:
Ratio analysis is a technique of analysis an interpretation of Financial Statements. It is
process of establishing and interpreting various ratios for helping in making certain
decisions. However, Ratio Analysis is not an end in itself. It is only a means of better
understanding of Financial strengths and weakness of the Firm because in the long-run
just near Calculation of Ratios does not serve any purpose, unless they are interpreted:
IV. STEPS INVOLVED:
1) SELECTION of relevant data from the Financial statement depend upon the objective
of the analysis.
2) CALCULATION of Appropriate Rations from the above data.
3) COMPARISION of calculated Ratios of the firm in the past, or the Ratios developed
from projected Financial or the Ratios of other firms or the comparison with the
industry to which the firm belongs.
4) INTERPRETATION of the Ratios.
RATIOS
1. LIQUIDITY RATIOS:
Liquidity ratios measure the ability of a firm to meet its short-term obligations and
reflect its short-term financial strength or solvency. In fact, liquidity is the per-requisite
for the very survival of a firm.
The important liquidity ratios are
A) Current Ratio
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B) Quick or acid-test ratio.
2. CURRENT RATIO:
The current ratio is a very popular financial ratio it measures the ability of the firm
to meet the current liabilities current assets gets converted into cash in the operational
cycle of the firm and provide the funds needed to pay the current liabilities current assets
includes cash, advances and prepaid expenses, current liabilities consists of loans and
advances, trade creditors, accrued expenses and provisions.
Ideal Ratio = 2:1
3. QUICK RATIO:
This ratio is also called acid test ratio this ratio establishes a relationship between
quick or liquid assets and current liabilities an assets is liquid if it can be converted into
cash immediately without a loss of value. Cash is the most liquid asset other liquid assets
are debtors and bills receivables and marketable securities inventories are considered to
be less liquid quick ratio is found by dividing the quick assets by total current liabilities.
LEVERAGE RATIOS
A) Property or Equity Ratio:
It is a various of debt-equity ratio. It establishes relationship between the proprietors
funds are the total tangible assets.
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CURRENT RATIO =CURRENT ASSETS
CURRENT LIABILITIES
CURRENT RATIO =CURRENT ASSETS
CURRENT LIABILITIES
EQUITY RATIO =SHARE HOLDER FUNDS
L ASSETS
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B) FIXED ASSETS RATIO TO LONG-TERM FUNDS:
This ratio exhibits the proportion of the total assets created through debt including
short-term and long-term liabilities. This ratio is of considerable significance to the
creditors in as much as it highlights the long-run solvency of the company.
NET FIXED ASSETS
FIXED ASSETS TO LONG TERM FUNDS =
LONG TERM FUNDS
C) DEBT EQUITY RATIO:
This ratio is calculated to measure the relative claims of out sides against the firms
assets. This ratio indicates the relationship between the external equities (or) the out side
funds and the internal equities (or) share holders funds.
NET FIXED ASSETSDEBT EQUITY RATION = ------------------------------------------
LONG TERM FUNDS
Ideal Ratio 2:1
D) TOTAL LIABILITIES TO TOTAL ASSETS RATIO:
The ratio is a small variant of equity ratio and can be simply calculated as 100-
equity ratio. The ratio indicates the relationship between total liabilities to outsiders
to total assets of a firm. There is no thumb rule of this ratio. It can be calculated as
follows:
NET FIXED ASSETS
SOLVENCY RATIO =
LONG TERM FUNDS
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4) ACTIVITY / TURNOVER / EFFICIENCY RATIOS:
These are also known as activity or efficiency ratios. Such ratios are concerned
with measuring the efficiency in asset management. The efficiency with which assets are
managed/used is reflected in the speed and rapidity with which they are converted into
sales.
Thus, there ratios are a test of relationship between sales/cost of goods sold and
assets.
1) Working Capital Turnover Ratio:
This is also known as working capital leverage ratio. This ratio indicates whether
or now working capital has been efficiently utilized in making sales. In case a
company can achieve higher volume of sales with relatively small amount of working
capital, it is an indication o the operating efficiency of the company.
COST OF SALES
WORKING CAPITAL RATIO =
NETW WORKING
2) FIXED ASSETS TURN OVER RATIO:
This ratio is based on the relationship between net sales and net fixed assets of the
firm it measure the efficiency of a firm in meaning and utilizing the assets.
NET SALES
FIXED ASSETS TURN OVER RATIO =
NET FIXED ASSETS
3) INVENTORY TURN OVER RATIO:
Every firm as to maintain certain level of inventory of finished goods so as to meet
the requirements of the business. Inventory turn over ratio is normally calculated as
sales/avg. inventory.COST OF GOODS SOLD
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INVENTORY TURN OVER RATIO =
AVG. INVENTORY
4) PROFITABILITY RATIOS
A) OPERATING PROFIT RATIO:
This ratio expresses the relationship between operating profit and sales with the help
of this ratio one can judge the managerial efficiency which may not be reflect the net
profit ratio.
OPERATING COST
OPERATING PROFIT RATIO = X 100
NET SALES
B) EARNING FOR SHARE
In order to avoid confusion on account of the valid meaning of the term capital
employed, the overall profitability can also be judged by calculating earning per share
with the help of following formula.
NET PROFIT AFTER TAX PREF. DIVIDEND
EPS = X 100
NO. OF EQUITY SHARES
C) GROSS PROFIT RATIO:
The gross profit reflects the efficiency with which management produces each
unit of product. This ratio indicates the average spread between the cost of goods
sold and sale revenue. A high gross profit is a sign of good management.
NET PROFIT
GROSS PROFIT RATIO =
SALES
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D) NET PROFIT MARGIN:
Net profit is obtained when operating expenses interest and taxes are subtracted from
gross profit. This ratio establishes relationship between new profit and sales indicates
management efficiency in manufacturing administering and selling the products. This
ratio is over all measures of the firms ability to turn each Rupee sales into net profit.
NET PROFIT
NET PROFIT RATIO =
SALES
E) RETURN ON EQUITY CAPITAL RATIO:
In the real sense, ordinary share holders are the real owners of the company, they
assume the highest risk performance share holders have a preference over ordinary share
holders in the payment of dividend as well as capital preference share holders get a fixedrate of dividend irrespective of the quantum of profits ofthe company.
The rate of dividend varies with the availability of profits in case of the ordinary
shares only thus the ordinary share holders are more interested in the profitability of a
company and the performance of the company should be judged on the basis of return on
equity capital of the company return on equity capital is the relation between profits of a
company and its equity capital it can be calculated by follows.
NET PROFIT AFTER TAX - PREFROLE =
EQUITY SHARE CAPITAL
F) RETURN ON INVESTMENT
Capital turn over ratio (or) return as share holders investment popularly know has
ROI is the relationship between net sales and the capital employed. It is calculated to
measure the efficiency with which a firm utilizes its resources.
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As capital is invested in a business to make sales and profits, this ratio is a good
indicator of profitability of a firm.
SALES
RETURN ON INVESTMENT RATIO =
APITAL EMPLOYED
FINANCIAL PERFORMANCE OF AXIS BANK
COMPARATIVE ANALYSIS
Comparative Balance Sheet of March 31-03-2007 and 31-03-2008.
S.
No.Liabilities
Year ending March Increase /
Decrease
Amount
Increase /
Decrease
Percentage
2007 2008
1 Share Capital 14318 15980 1662 11.60
2 Deposits 137385 163,611 26226 19.08
3 Reserves 102482 110667 8185 7.98
4 Borrowings 36484 45845 9361 25.65
5 Payables 5361 7363 2002 37.34
6 Profits 8277 6566 -1711 20.67
Total Liabilities 304307 350032 45725 15.02
Assets
1 Advances 88763 112941 24178 27.23
2 Investments 74161 90205 16044 21.63
3 Properties 38046 46222 7816 20.35
4 Stocks 70764 67906 (-) 2858 4.03
5 Receivables 31790 32409 619 1.94
6 Cash in
Hand&AXIS Bank
423 349 -74 17.49
Total Assets 304307 350032 45725 15.02
Comparative Balance Sheet of March 31-03-2008 and 31-03-2009.
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S.
No.Liabilities
Year ending March 31 Increase /
Decrease
Amount
Increase /
Decrease
Percentage
2008 2009
1 Share Capital 15980 16957 977 6.11
2 Deposits 163611 178645 15034 9.18
3 Reserves 110667 133830 23163 20.93
4 Borrowings 45845 20000 -25845 56.37
5 Payables 7363 12388 5025 69.01
6 Profits 6566 10155 3589 54.66
Total Liabilities 350032 371975 21943 6.26
Assets
1 Advances 112941 125753 12812 11.34
2 Investments 90205 142677 52472 58.163 Properties 46222 48399 2177 4.70
4 Stocks 67906 35902 -32004 -47.12
5 Receivables 32409 18830 -13579 -41.89
6 Cash in hand
&AXIS Bank
349 414 65 18.62
Total Assets 350032 371975 21943 6.26
Comparative Balance Sheet of March 31-03-2009 and 31-03-2010.
S.
No.Liabilities
Year ending March 31 Increase /
Decrease
Amount
Increase /
Decrease
Percentage
2009 2010
1 Share Capital 16957 18210 1253 7.382 Deposits 178645 182289 3644 2.03
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3 Reserves 133830 142392 8562 6.39
4 Borrowings 20000 37464 17464 87.32
5 Payables 12388 12545 157 1.26
6 Profits 10155 9813 -342 3.36
Total Liabilities 371975 402713 30738 8.26Assets
1 Advances 125753 134977 9224 7.33
2 Investments 142677 134718 -7959 5.57
3 Properties 48399 49449 1050 2.16
4 Stocks 35902 54276 18374 51.17
5 Receivables 18830 28730 9900 52.57
6 Cash in hand
&AXIS Bank
414 563 149 35.99
Total Assets 371975 402713 30738 8.26
Comparative Balance Sheet of March 31-03-2010 and 31-03-2011.
S.
No.Liabilities
Year ending March 31 Increase /
Decrease
Amount
Increase /
Decrease
Percentage
2010 2011
1 Share Capital 18210 19494 1284 7.05
2 Deposits 182289 194020 11731 6.43
3 Reserves 14392 164485 22093 15.51
4 Borrowings 37464 53858 16394 43.75
5 Payables 12545 12658 113 0.9
6 Profits 9813 10555 742 7.56
Total Liabilities 402713 455070 52357 13.00
Assets1 Advances 134977 146047 11070 8.20
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2 Investments 134718 144331 9613 7.13
3 Properties 49449 52875 3426 6.92
4 Stocks 54276 57676 3400 6.26
5 Receivables 28730 52759 24029 83.63
6 Cash in hand&AXIS Bank
563 1382 819 145.47
Total Assets 402713 455070 52357 13.00
Comparative Balance Sheet of March 31-03-2011 and 31-03-2012.
S.
No.Liabilities
Year ending March 31 Increase /
Decrease
Amount
Increase /
Decrease
Percentage
2011 2012
1 Share Capital 19494 22195 2701 13.85
2 Deposits 194020 145535 -48485 -24.98
3 Reserves 164485 189409 24924 15.15
4 Borrowings 53858 160694 106836 198.36
5 Payables 12658 21544 8886 70.20
6 Profits 10555 10973 418 3.96
Total Liabilities 455070 550350 95280 20.93
Assets
1 Advances 146047 168315 22268 15.24
2 Investments 144331 153768 9437 6.53
3 Properties 52875 69307 16432 31.07
4 Stocks 57676 81341 23665 41.03
5 Receivables 52759 77171 24412 46.27
6 Cash in hand
&AXIS Bank
1382 448 -934 -67.58
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Total Assets 455070 550350 95280 20.93
Comparative Balance Sheet of March 31-03-2012 and 31-03-2013.
S.
No.Liabilities
Year ending March 31 Increase /
Decrease
Amount
Increase /
Decrease
Percentage
2012 2013
1 Share Capital 22195 23805 1610 7.25
2 Deposits 145535 145498 -37 -0.025
3 Reserves 189409 216045 26636 14.064 Borrowings 160694 208818 48124 29.94
5 Payables 21544 21053 -491 -2.27
6 Profits 10973 10431 -542 -4.93
Total Liabilities 550350 625650 75300 13.68
Assets
1 Advances 168315 209200 40885 24.29
2 Investments 153768 143783 -9985 -6.49
3 Properties 69307 80303 10996 15.86
4 Stocks 81341 136935 55594 68.34
5 Receivables 77171 54219 -22952 -29.74
6 Cash in hand
&AXIS Bank
448 1210 762 170.08
Total Assets 550350 625650 75300 13.68
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RATIO ANALYSIS
CURRENT RATIO
CURRENT RATIO=CURRENT ASSETS/CURRENT LIABILITIES
Current Ratio
Table-I
Year Current Assets Current Liabilities Current Ratio
2007-08 151174307.30 48350148.35 3.12
2008-09 110019874.20 31427868.90 3.50
2009-10 133152215.10 47825733.53 2.78
2010-11 160141386.10 60592119.34 2.642011-12 217585014.40 831347724.26 2.61
2012-13 260494715 110247969.80 2.36
Average 172094585.4 1129791564 2.83
Here:
Current Assets = Cash and AXIS Bank Balance + short
Term loans+Receivables+stock(closing)
Current Liabilities = Short term Debts + Payables
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GRAPH-I
INTERPRETATATION
AXIS Bankers rule of thumb or arbitrary standard of liquidity for a firm is 2:1 i.e.current assets doubles current liabilities.
The current ratio of society is very good, except 2005-06 it fell down to 2.36% and
very exceptional in the year 2008-09 at 3.50%
The average current ratio registered is 2.83% during the review period.
The current ratio in the beginning year of the study i.e. 2007-08 is 3.12% and has
decreased to 2.36% of last year of the study i.e. 2009-10.
47
Current Ratio
0
0.5
1
1.5
2
2.5
3
3.5
4
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Current Ratio
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QUICK RATIO
Quick Ratio = Quick Assets/Current Liabilities
TABLE-II
Year Quick Assets Current Liabilities Ratios
2007-08 83268307.30 48350148.35 1.72
2008-09 74118233.20 31427868.90 2.35
2009-10 78876410.10 47825733.53 1.64
2010-11 102465816.10 60592119.34 1.692011-12 136244504.40 83134724.26 1.63
2012-13 123559985 110247969.80 1.12
Average 99755542.7 1129791564 1.69
Here:
Quick Assets = Current Assets (Closing stock + prepaid expenses)
GRAPH-II
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Interpretation
An observation of table reveals the year highest ratio is 2.35 during the year 2008-09
and lowest ratio is 1.12 during the period 2012-13.
Average ratio is 1.69 during the six years period.
Quick ratio represents a satisfactory liquidity financial condition. A quick ratio of 1:1
(or) more does not necessarily imply sound liquidity position. By observing the liquid
position is satisfied and it is very good.
DEBT EQUITY RATIO
49
Ratios
0
0.5
1
1.5
2
2.5
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Ratios
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DEBT-EQUITY RATIO = External Equity / Internal Equity
TABLE-III
Year Debt Equity Ratio
2007-08 209456000 133213000 1.57
2008-09 198645000 160942000 1.23
2009-10 219753000 170415000 1.28
2010-11 247878000 194534000 1.27
2011-12 306229000 222577000 1.37
2012-13 354315866.5 250280699.9 1.41
Average 256046144.4 188660283.3 1.35
Here:
Debt = Deposits + Borrowings
Equity = Share capital + undistributed profits + Reserves
GRAPH-III
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INTERPRETATION
According the above table there is balance between external sources and internal
sources in six years.
Hence it can be understood that the AXIS Bank was able to use the lost cost of
external funds to magnify these earnings. The rule of thumb for debt-equity ratio is
2:1
RETURN ON SHARE HOLDERS INVESTMENT
51
Ratio
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Ratio
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Return on Shareholders Investment = Net Profit / Shareholders Funds
TABLE-IV
Year Net Profit Shareholders Funds Ratios
2007-08 6565807.39 133213000 0.049
2008-09 10155310.94 160942000 0.063
2009-10 9813047.66 170415000 0.057
2010-11 10555010.36 194534000 0.054
2011-12 10973266.17 222577000 0.049
2012-13 10430929.45 250280699.9 0.041
Average 9748895.328 188660283.3 0.052
Here:Share Holders funds = Share Capital + Reserves + Undistributed profits
GRAPH-IV
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INTERPRETATION
An observation at the table reveals that the ratio was shown fluctuating trend during
the six years period. The ratio was registered at 0.063 during the 2001-02 and
declined to 0.049, 0.049 and 0.041in the years 2007-08, 20011-12 and 2012-13
respectively.
An average the ratio was observed at 0.052 during the study period which indicated
that return on shareholders study is very poor.
RETURN ON TOTAL ASSETS RATIO:
53
Ratios
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Ratios
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Return on Total Assets Ratio = Net Profit / Total Assets
TABLE-V
Year Net Profit Total Assets Ratios
2007-08 6565807.39 350032000 0.18
2008-09 10155310.94 371974000 0.027
2009-10 9813047.66 402712000 0.024
2010-11 10555010.36 455070000 0.023
2011-12 10973266.17 550350000 0.019
2012-13 10430929.45 625639932.21 0.016
Average 9748895.328 459296322 0.0481
GRAPH-V
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INTERPRETATION
By observing the table the highest ratio is 0.0027 during the period 2008-09.
The ratio declined to 0.018% during 2008-09 and the average ratio for the period of
study is 0.048
FINDINGS
55
Ratios
0
0.02
0.04
0.06
0.08
0.1
0.12
0.140.16
0.18
0.2
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Ratios
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The enrollments of shareholders are very good. There are 6202 share holders during
the year 2012-13.
The share has increased by 38% than the first year of study i.e., in the year 2010-11.
It reveals that society is following members beneficial oriented policies and that is
leading to more enrollments.
The current ratio and quick ratio of the AXIS Bank is above the ideal ratios i.e., 2:1
and 1:1 indicating the AXIS Bank maintain sufficient current assets to meet its current
liabilities at a particular point of time and liquidity position is satisfactory.
The return on total assets ratio was observed at very poor.
The current ratio and quick ratio of the AXIS Bank is above the ideal ratios i.e., 2:1
and 1:1 indicating the AXIS Bank maintain sufficient current assets to meet its current
liabilities at a particular point of time and liquidity position is satisfactory.
CONCLUSIONS
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The society have been very much successful in mobilizing the deposits; it has been
following positive policies by giving its member various options of depositing, their
saving as discussed in earlier chapter, the present deposits are 145498000.Profitability ofa concern depends on its income generation as advances are source of income as they
earn interest, more advances means more interest and that would mean more income
generation, societys has advances in the year 2012-13 is 209200000.
As among deposited by members in society are increasing, it is advancing loans for
development purpose and the amount of loans has increased 2 times from the first year of
study. The current ratio and quick ratio of the AXIS Bank is above the ideal ratios i.e.,
2:1 and 1:1 indicating the AXIS Bank maintain sufficient current assets to meet its current
liabilities at a particular point of time and liquidity position is satisfactory. The return on
total assets ratio was observed at very poor. The current assets are more than the
shareholders funds. It indicates that the current assets at the AXIS Bank are financed
from the outsiders funds. The AXIS Bank has utilized the total assets effectively. The
overall financial position of the society is good.
SUGGESTIONS
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The society should take some corrective measures to control its productive cost to
increase its profits.
The society should decrease its unrecovered percentage of loans and advances. Itshould study the credit worth for the member and based on this should advance loans.
If the society starts recording its non-performing asset (NPA). It could understand the
current financial position of its at the end of the year and it could take necessary to
control NPAS as these are productive.
The society should try to see that the investments are not followed in current assets, as
it is observed that it is maintaining the a high current ratio when compared with ideal
ratio.
BIBLIOGRAPHY
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BOOKS AUTHORES
Financial management Khan & jain
Financial management I.m.pandey
Financial management Prasannchandra
Management accountancy S.N. Maheshwari
Management accounting R.K. Sharma & Shesh K. Gupta
Websites
www.Axis.com
www.google.co.in
http://www.hdfc.com/http://www.hdfc.com/http://www.google.co.in/http://www.hdfc.com/http://www.google.co.in/