EXECUTIVE SUMMERY

Today, banking is no more practiced the way it was traditionally done earlier. It has its footprint in diverse fields. It has undergone change in both content and the way it is carried out.

Technology, new customized products, allied activities, intense competition, etc. have been the buzzword. Customer satisfaction has never been in so much focus as it is now. Survival has been rendered that much difficult.The situation demands, among other things, empowering the staffs, who are the real ambassadors of the bank, with adequate product knowledge. A well-informed staff goes a long way in dealing efficiently with the customers, ensuring customer satisfaction, and ultimately good business for the bank.In todays competitive world, banks are facing only two main challenges. Firstly, to retain the existing flock of their customers as also to add new accounts and secondly to have better efficiency ratios and consequently improve the bottom-line. Banks are thus looking at new initiatives and products to woo customers by offering the best of services at their doorstep.

The foundation of any service industry is firmly rooted in customer satisfaction.Effective communication skill coupled with the sound product knowledge is very much essential in these days of intense competition. Financial statement analysis of the SHIKSHAK SAHAKARI BANK.

Collecting primary as well as secondary data did the research. A questionnaire made before approaching the branch manager of SHIKSHAK SAHAKARI BANK.

As the SHIKSHAK SAHAKARI BANK is Co-Operative bank so, I have chosen the topic, which will provide me information about the overall performance of the bank in recent periods.

Primary data was collected through questionnaire method by asking relevant questions regarding to the bank. Also asking questions to staff members and with help of annual report.

Personal discussion with the manager and staff member had provided very important details about the bank.Secondary data was collected with the help of Internet websites and Handbook and brochure of the bank.The data was analyzed properly with the help of bar diagrams.Through this analysis it is observed that the SHIKSHAK SAHAKARI BANKs performance found quite good and satisfactory in terms of profit, income and deposits. And it had seen growth in every year.Hence, SHIKSHAK SAHAKARI BANK is going in the right direction to be a competitive bank in terms of its financial position.

ORGANISATION PROFILE

With years, banks are also adding services to their customers. The Indian banking industry is passing through a phase of customers market. The customers have more choices in choosing their banks. A competition has been established within the banks operating in India.

With stiff competition and advancement of technology, the services provided by banks have become more easy and convenient. The past days are witness to an hour wait before withdrawing cash from accounts or a cheque from north of the country being cleared in one month in the south.

In India the banks are being segregated in different groups. Each group has their own benefits and limitations in operating in India. Each has their own dedicated target market. Few of them only work in rural sector while others in both rural as well as urban. Many even are only catering in cities. Some are of Indian origin and some are foreign players.All these details and many more are discussed over here. The banks and its relation with the customers, their mode of operation, the names of banks under different groups and other such useful informations are talked about. One more section has been taken note of is the upcoming foreign banks in India. The RBI has shown certain interest to involve more of foreign banks than the existing one recently. This step has paved a way for few more foreign banks to start business in India In such a situation the customer has become essential to gauge the competitors offerings in terms of innovative products and services to the customer and the reason behind customers loyalty to a particular bank.In this regards, the scope of the project covers analyzing the Co-Operative sector banks in India with special emphasis on the product portfolio, both corporate and retail, evaluating the thrust areas and strategies of these banks, and evolving a strategy for Shikshak Sahakari Bank based on the above findings.The methodology employed for the above was secondary research backed by primary research in the form of interviews of bank officers and corporates. The study was limited to the Chandrapur market.ORIGIN OF COOPERATIVE BANKS IN INDIA

The origins of the cooperative banking movement in India can be traced to the close of nineteenth century when, inspired by the success of the experiments related to the cooperative movement in Britain and the cooperative credit movement in Germany, such societies were set up in India. They are the primary financiers of agricultural activities, some small-scale industries and self-employed workers. The Anyonya Cooperative Bank in India is considered to have been the first cooperative bank in Asia.Cooperative movement is quite well established in India. The first legislation on cooperation was passed in 1904. In 1914 the Maclagen committee envisaged a three tier structure for cooperative banking viz. Primary Agricultural Credit Societies (PACs) at the grass root level, Central Cooperative Banks (CCBs) at the district level and State Cooperative Banks (SCBs) at state level or Apex Level. The first urban cooperative bank in India was formed nearly 100 years back in Baroda. In the beginning of 20th century, availability of credit in India, more particularly in rural areas, was almost absent. Agricultural and related activities were starved of organized, institutional credit. The rural folk had to depend entirely on the money lenders, who lent often at usurious rates of interest. The cooperative banks arrived in India in the beginning of 20th Century as an official effort to create a new type of institution based on the principles of cooperative organization and management, suitable for problems peculiar to Indian conditions. These banks were conceived as substitutes for money lenders, to provide timely and adequate short-term and long-term institutional credit at reasonable rates of interest. In the formative stage Cooperative Banks were Urban Cooperative Societies run on community basis and their lending activities were restricted to meeting the credit requirements of their members. The concept of Urban Co-operative Bank was first spelt out by Mehta Bhansali Committee in 1939 which defined on Urban Cooperative Bank. Provisions of Section 5 (CCV) of Banking Regulation Act, 1949 (as applicable to Co-operative Societies) defined an Urban Cooperative Bank as a Primary Co-operative Bank other than a Primary Cooperative Society was made applicable in 1966.

FEATURES OF COOPERATIVE BANKS Cooperative Banks are organised and managed on the principal of co-operation, self-help, and mutual help. They function with the rule of "one member, one vote". Function on "no profit, no loss" basis. Cooperative banks, as a principle, do not pursue the goal of profit maximization. Cooperative bank performs all the main banking functions of deposit mobilization, supply of credit and provision of remittance facilities. Cooperative Banks provide limited banking products and are functionally specialists in agriculture related products. However, cooperative banks now provide housing loans also. Cooperative bank do banking business mainly in the agriculture and rural sector. Cooperative banks are perhaps the first government sponsored, government-supported, and government-subsidized financial agency in India. They get financial and other help from the Reserve Bank of India NABARD, central government and state governments. Cooperative Banks belong to the money market as well as to the capital market. Primary agricultural credit societies provide short term and medium term loans. Cooperative banks are financial intermediaries only partially. The sources of their funds (resources) are: (a) Central and state government, (b) The Reserve Bank of India and NABARD,(c) Other co-operative institutions,(d) Ownership funds and,(e) Deposits or debenture issues. It is interesting to note that intra-sectorial flows of funds are much greater in cooperative banking than in commercial banking. Inter-bank deposits, borrowings, and credit from a significant part of assets and liabilities of cooperative banks. This means that intra-sectorial competition is absent and intra-sectorial integration is high for cooperative bank. Cooperative Banks are subject to CRR and liquidity requirements as other scheduled and non-scheduled banks are. However, their requirements are less than commercial banks. Since 1966 the lending and deposit rate of commercial banks have been directly regulated by the Reserve Bank of India.

STRUCTURE OF COOPERATIVE BANKING RBINABARDSCBsSLDBsUCBsCCBsCLDBsPLDBsBRANCHES OF SLDBsPACS

SCBs: State Cooperative BanksSLDBs: State Land Development BanksUCBs: Urban Cooperative BanksCCBs: Central Cooperative BanksCLDBs: Central Land Development BanksPACS: Primary Agricultural Credit SocietiesPLDBs: Primary Land Development Banks

TYPES OF COOPERATIVE BANKS1) STATE COOPERATIVE BANKS (SCBs)State cooperative banks are a federation of central cooperative banks and act as a watchdog of the cooperative banking structure in the state. Its funds are obtained from share capital, deposits, loans and overdrafts from the Reserve Bank of India. State cooperative banks lend money to central cooperative banks and primary societies and not directly to farmers. 2) CENTRAL COOPERATIVE BANKS (CCBs)Central cooperative banks are the federations of primary credit societies in a district and are of two types those having a membership of primary societies only and those having a membership of societies as well as individuals. The funds of the bank consist of share capital, deposits, loans and overdrafts from state cooperative banks and joint stocks. These banks finance member societies within the limits of the borrowing capacity of societies.3) PRIMARY AGRICULTURAL CREDIT SOCIETIES (PACS)Cooperatives have played a major role in the supply of finance to agricultural sector for the development of land, irrigation system and for its mechanization. The agricultural cooperative credit in Punjab is divided into two sectors mainly, one dealing with short and medium-term credit and the other with the long-term credit. The long term credit is awarded from the Punjab State Cooperative Land Mortgage Banks at the apex and the Primary Cooperative Land Mortgage Banks at district/tehsil level.4) PRIMARY COOPERATIVE BANKS (PCBs)They are non-agricultural societies. These are of two types: Urban cooperative banks and Salary earners societies. Development of PCBs is looked after by the RBI. The RBI and IDBI offer them concessional refinance facility on a selected basis. They operate in urban and semi-urban areas. They provide housing finance and loans and advances for various purposes such as petty trade and industry.

DIFFICULTIES FACED BY COOPERATIVEBANKS IN RURAL AREAS1) Slow progress: The progress of co-operative banks is not up to the expectation and is slow when comparing other type of banks because of many restrictions on their operations.2) Limited scope of investment: The main objective of co-operative banks is to provide credit facilities to the poor people i.e., to small and marginal farmers and other weaker sections. They were originally having limited scope to invest their surplus funds freely.3) Delay in decision making: The co-operative banks directly or indirectly by various agencies i.e., NABARD, RBI. Thus it takes long time to take decision on some important issues. This, in turn affects the progress of co-operative banks.4) Lack of training facilities: Generally the staff of co-operative banks is urban oriented and they may not know the problems and conditions of rural areas. Lack of training facility concerning these areas also affects the growth of co-operative banks.5) Poor recovery rate: The recovery performance of the co-operative banks is not up to the mark. the reason for poor recovery of loans and mounting overdue are; inadequate supervision and follow up action to assess the end use of credit by co-operative banks due to inadequate staff in banks, poor Identification of beneficiaries, inadequate generation of output and income by the beneficiaries, poor marketing facilities.6) Lack of local participation: Rural co-operative banks have not received sufficient local participation. The cooperative banks have been thrust upon the rural people from above without involving local people in its operation and management. In this connection, it is suggested that knowledgeable persons in the rural areas need be associated with the management of co-operative banks.7) Lack of co-ordination: There is lack of proper co-ordination between co-operative banks and other institutional financing agencies like commercial banks and RRBs. Also, there is inadequate co-ordination between co-operative banks and other developmental agencies operating in rural areas. This has hampered the progress of co-operative banks.8) Poor development of rural areas: In spite of several efforts made during the course of development plans to promote the development of rural areas, it has not taken place in a significant way. The areas, at present lack economic infra- structures like; facilities of marketing storage and distribution of inputs. Besides, social infrastructure like; schools, medical facilities. As a result, co-operative banks find it extremely difficult to operate in such areas.

Bank Overview:Shikshak Sahakari Bank Ltd.was established in the year 1979 with the aim to help teachers to meet their financial needs. The thought of establishing a bank had cropped up in the minds of its founders in the year 1976. However, it saw its realisation in January 1979. The Bank was started with a share capital of Rs. 3.50 lacs only. The founders of the Bank were teachers by profession. It can be said that Shikshak Bank is a bank founded by teachers for teachers. However, later the Bank did not keep itself limited to teachers but opened its membership to all. It also started financing for commercial purposes from the year 1987. The Bank achieved the deposit target of Rs. 100.00 crores in the year 1996-97. Consequently, it was awarded the Scheduled Status on May 22, 1999. Shikshak Bank is the first bank to get this status within twenty years of its inception, which is obviously a very short time-period. However, the banks accomplishments dont end here. In the year 1999-2000, the Bank secured 20th rank amongst other banks with regard to deposits and was placed first in Vidarbha. In the year 2000-2001, it rose to the 19th position amongst the banks with regard to deposits while maintaining its top position among the banks of Vidarbha. The Bank presently has 19 branches functioning in Nagpur and Chandrapur districts. It has plans to open more branches in the near future. The area of operation of the Bank includes Nagpur, Chandrapur, Wardha, Yavatmal, Bhandara and Gadchiroli districts.CommitmentThe Bank has advanced loans extensively to various industries at MIDC, Hingna, Nagpur, Butibori, Kalmeshwar, Chandrapur, etc. and also for commercial purposes. Besides, it has also given advances to traders, transporters, etc. 70 % of the Banks advances have been made for business and industrial purposes. The Bank has also made 60 % of its advances in the priority sector.The Bank has always been contributing for various social causes including relief for victims of natural calamities. Apart from this, the Bank regularly makes donations from its Member Welfare Fund for the benefit of its members.The GrowthIncreasing deposits is not sufficient. Bank also needed to increase its advances to achieve the required CD ratio. For this, Bank has launched new, attractive loan schemes like Sobati, SSB Suvidha, SSB Aadhaar, SSB Sathi, SSB Sarthi, SSB Sahyog, etc., which are sure to boost our credit portfolio.Very recently, Bank has obtained permission from the Reserve Bank of India and the Govt. of Maharashtras Dept. of Cooperation to launch a scheme for long-term deposits. Shikshak Bank is probably the first one in Vidarbha to introduce such a scheme. As per this scheme, which has been named SSB-Sahabhaag, depositors can keep their deposits with the Bank for a period of minimum 5 years to maximum 10 years and earn an interest @ 11 % on them. The scheme has been made open to public on 13th February 2009 and it will close on 31st March 2009. The scheme has received a huge response until now. Bank has mobilized deposits to the tune of 2.00 crores on day one itself. The RBI has set a target of Rs.20.00 crores for the Bank to achieve under this scheme till 25th March 2009. These deposits will be included in Tier-II Capital of the Bank. And hence, if the target is achieved it will bring up the CRAR of the Bank to 9 % and turn Banks Net Worth to positive. Achievement of these parameters will play the main role in lifting the Bank from grade IV to grade I. Bank has, therefore, pinned great hopes on this scheme and seeing the huge response it is getting, Bank is sure to achieve the required parameters and rise to upper grade.

Our Mission

Mahatma Gandhi has said that strength does not come from physical capacity, it comes from an indomitable will. Shikshak Bank has proved this time and again and, thus, set an example for others. It has survived all odds and is now on the path of well-being and will soon be prosperous, thanks to the hard work, indomitable spirit and perseverance of its Management and Staff. It is said that God helps them who help themselves. Same has happened with Shikshak Bank. The Management and the staff of the Bank are working hard together and with their customers faith with them, the Bank is sure to reach new heights.OUTLINE OF PROBLEM

To know the financial position of organization. To analyze the financial position of organization with the help of B/S. P & L A/C for previous 3 years. To find out whether Bank performs as per standard or not. To provide for the likely financial position of the SHIKSHAK SAHAKARI BANK as at the end of the budget year, duly compared with the actual of the previous year and latest estimates for the current year.

RESEARCH METHODOLOGY

Intensive research has been done during this project to find out the necessary information regarding both the Ratio analysis in SHIKSHAK SAHAKARI BANK. While working in the organization, I could gather much information during practical work being carried out by me. Apart from this, the methodology applied to collect the necessary information is discussed below.

Research can be done primarily with the help of two types of data: - Primary Data: - This is mainly concerned with first-hand information. It consists of preparing the questionnaire or taking interviews, Based on the information received from the answer written in the questionnaire or the interviews detailed reports is being prepared. Secondary Data: -This is mainly concerned with first-hand information. It consists of collecting the relevant information from different documents, books, journals, previous reports etc.During my project, there was a use of the second method i.e. Secondary data for my research. I used books, documents, previous year reports etc. to get the detailed information regarding financial statements.

Research Methodology can also be classified as: - Qualitative study : -This is mainly concerned with collecting theoretical information.

Quantitative study : -This is mainly concerned with collecting practical and numerical information.I have used both the studies as research methodology for my project report. Thus, these are the methodology, which are used for preparing my project report.

Theoretical Background

Introduction to Ratio Analysis

INTRODUCTION: -The basis for financial analysis, planning and decision making is financial information. A business firm prepares its final accounts viz. Balance Sheet & Profit and Loss Account, which provides useful financial information for the purpose of decision making. Financial information is needed to predict compare and evaluate the firms earning ability. The former statement viz. Profit & Loss Account shows the operating activities of the concern and the later Balance Sheet depicts the balance value of the acquired assets and of liabilities at a particular point of time. However, these statements do not disclose all of the necessary and relevant information. For the purpose of obtaining the material and relevant information necessary for ascertaining the financial strengths and weaknesses of an enterprise, it is necessary to analyze the data depicted in the financial statement. The financial manager has certain analytical tools which helps is financial analysis and planning. For instance funds flow statement is a valuable aid to a financial manager or creditors in evaluating the uses of funds by a firm and in determine how the firms finance those uses. In addition to studying past flow, the financial manager can evaluate future flows by means of funds statement based on forecasts. Now, we shall discuss various tools of financial analysis and planning viz.financial statement analysis, its type etc.

Financial statement analysis

Its the process of identifying the financial strength and weakness of a firm from the available accounting data and financial statements. The analysis is done by properly establishing the relationship between the items of balance sheet & profit & loss account. The first task of financial analyst is to determine the information relevant to the decision under consideration from the total information contained in the financial statement. The second step is to arrange information in a way to highlight significant relationships. The final step is interpretation and drawing of inference and conclusion. Thus financial analysis is the process of selection, relating and evaluation of the accounting data / information.

Purpose of Financial Statement analysis

Financial Statement Analysiss is the meaningful interpretation of Financial Statements for Parties Demanding Financial Information. Its not necessary for the proprietors alone.Following are the example of the purpose of Financial Statement Analysis The Govt. may be interested in knowing the comparative energy consumption of same private sector and public sector cement companies : A nationalized bank may be keen to know the possible debts coverage out of profit at the time of lending. Prospective investors may be desirous to know the actual and forecasted yield data. Customers want to know the business viability before entering into a long-term contract.

In general, the purpose of financial statement analysis is to aid decision making by the users of accounts.Step to be taken for financial statement analysis is: Identification the users purpose. Identification of data source is required to be analyzed to suck the purpose. Selecting the techniques to be used for analysis.

Financial Statement Analysis covers study of relationships with a set of financial statements at the point of time and with the trends in these relationship over time, This means that it may be study of some comparable firms at the particulars time, say financial year 1999-2000, or it may be study of a particulars form over a period of time, say 1991-2000 or it may covers both.Advantages of Ratio Analysis: 1. It helps in analysis of the situation i.e. analysis on the financial situation and performance. 1. Inter-firm and Inra-firm comparison is both possible on the basis of accounting ratio 1. Accounting Ratio not only indicates the present position but they also indicate the cause leading up to the position of a large extent 1. It helps in obtaining best result when ratios for a number of years are put in tabular form so that the figure for one year can be easily compoared with those of other year 1. It indicates the trend of the change, which helps in preparation of estimates for the future. 1. They provide simplicity to the complex accounting information presented by the financial statements 1. They are very helpful to outsiders as well as for internal management 1. It is very helpful to internal managements, discharge of the basic managerial functions. 1. It also helps in planning, policy making & controlling the activities. 1. They are helpful in establishing the standard casting system.

Types of financial statement analysis:The main objective of financial analysis is to determine the financial health of a business enterprise. The analysis may be of the following types:

External analysis: - This analysis is performed by outside parties such as trade creditors, investors, suppliers of long term debts etc.

Internal analysis: - This analysis is performed by the corporate finance and accounting department and is more detailed than external analysis.

Horizontal analysis: - This analysis compares the financial statement viz. Profit & Loss A/Cs and Balance Sheet of previous year along with the current year. Vertical analysis: - This analysis converts each element of the information into a % of the total amount of statement so as to establish relationship with other components of the same statement.

Trend analysis: - This analysis compares ratio of different components of the financial statement related to different period to those of the base year.

Ratio analysis: -This analysis establishes the numerical or quantitative relationship between two items /variables of financial statement so that the strengths and weaknesses of a firm as well as its historical performance and current financial position can be determined.

Funds flow statement: - This statement provides a comprehensive idea about the movement of finance in a business unit during a particulars period of time.

Break even analysis: - This type of analysis refers to the interpretation of financial data that represent operating activities.

RATIO ANALYSISRatio Analysis is a widely used tool of financial analysis. The term ratio in it refers to the relationship expressed in mathematical terms between two individual figures and group of figures connected with each other in some logical manner and is selected from financial statements of the concern. The ratio analysis is based on the fact that a single accounting figure by itself may not communicate any meaningful information but when expressed as a relative to some other figure, it may definitely provide some significant information. The relationship between two or more accounting figures/groups is called a financial ratio. A financial ratio helps to express the relationship between two accounting figures in such a way that users can draw conclusion about the performance, strengths and weaknesses of a firm.

Classification of Ratios:1. According to source: According to source: Financial ratios can be classified on following basis according to source:(i) Revenue Ratios:When two variables are taken from revenue statement the ratio so computed is known as Revenue ratio, for example,Net Profit x 100

Sales

Or Material Consumedx 100

Cost of Goods Sold

(ii) Balance Sheet ratio: When two variables are taken from the Balance Sheet the ratio so computed is known a Balance Sheet ratio, for example,Current Assets ; Net Worth Current liabilitiesTotal liabilities(iii) Mixed ratio : When one variable is taken from the Revenue Statement and other is taken from the Balance Sheet the ratios so computed are known as mixed ratios, for example, Net profit x 100Sales Capital EmployedAverage Total Assets

2. According to usage : The following seven categories of financial ratios have been advocated by George Foster of Stanford University and these seem to cover exhaustively different aspects of a business organization, these categories have been listed as below:1. Cash position2. Liquidity3. Working Capital/ Cash Flow4. Capital structure5. Profitability6. Debt Services Coverage7. Turnover

Large number of financial ratios is used within each category and some of these may carry same information rather than focusing on any new light. Therefore, it is necessary to avoid duplication of information. The analyst should be selective with regard to the use of financial ratios.Broadly speaking, the operations and financial position of firm can be described by studying its short term and long term liquidity position, profitability and its operational activities. Therefore, ratios can be classified into following four broad categories:

(i) Liquidity Ratios(ii) Capital Structure/ leverage Ratios.(iii) Activity Ratios.(iv) Profitability Ratios.

These ratios are discussed now:Liquidity Ratios:The terms liquidity and short-term solvency are used synonymously. Liquidity or short-term solvency means ability of the business to pay its short-term liabilities. Inability to pay-off short-term liabilities affects its credibility as well as its credit rating. Continuous default on the part of the business leads to commercial bankruptcy. Eventually such commercial bankruptcy may lead to its sickness and dissolution. Short-term lenders and creditors of a business are very much interested to know its state of liquidity because of their financial stake.Traditionally, two ratios are used to highlight the business liquidity. These are current ratio and quick ratio. Other ratios include cash ratio, interval measure ratio and networking capital ratio.

(i) Current ratio: Current Assets Current Liabilities (ii) Quick ratio: Quick AssetsCurrent Liabilities

Capital Structure/ Leverage ratios:The capital structure/ leverage ratios may be defined as those financial ratios, which measure the long-term stability and structure of the firm. These ratios indicate the mix of funds provided by owners and lenders and assure the lenders of the long-term funds with regard to (i) Periodic payment of interest during the period of the loan and (ii) Repayment of principal amount on maturity.Therefore leverage ratios are of two types:a) Capital structure ratios andb) Coverage ratios. (a) Capital Structure Ratios :These ratios provide an insight into the financing techniques used by a business and focus, as a consequence, on the long-term solvency position. From the Balance Sheet one can get only the absolute fund employed and its sources, but only capital structure ratios show the relative weight of different sources. In the Balance Sheet the student may find shareholders fund, loan fund and current liabilities and provisions. These are very often classified as owners equities and external equities. Owners equity means share capital, both equity share capital and preference share capital and reserves and surplus.

External Equity means all outside liabilities (inclusive of current liabilities and provisions). Also these are sometimes classified as equity and debt. Equity means shareholders fund and Debt means long term Borrowed fund (so short-term loans, current liabilities and provisions are excluded). As per guidelines for issue of Debentures by Public Limited Company debt means term loan, debentures and bonds with an initial maturity period of five years or more, including interest accrued thereon. It also includes all deferred payment liabilities but it does not include short-term bank borrowing and advances, unsecured deposits or loans from the public, shareholders and employees, and unsecured loans and deposits from others. It should also include proposed debenture issue. Equity means paid up share capital including preference share capital and reserves.Two popularly used capital structure ratios are:(a) Owners Equity Total Equity

This ratio indicates proportion of owners fund to total fund invested in the business. Traditionally it is believed that higher the proportion of owners fund lower is the degree of risk.(b) Debt Equity Ratio = Debt EquityThis ratio indicates the proportion of debt fund in relation to equity. This ratio is very often referred in capital structure decision as well as in the legislation dealing with the capital structure decisions (i.e. issue of shares and debentures). Lenders are also very keen to know this ratio since it shows relative weights of debt and equity. (b) Coverage Ratios: - The coverage ratios measure the firms ability to service the fixed liabilities. These ratios establish the relationship between fixed claims and what is normally available out of which these claims are to be paid. The fixed claims consist of (i) Interest on loans(ii) Preference dividend(iii) Amortization of principal or repayment of the installment of loans or redemption of preference capital on maturity. The following are important coverage ratios:(i) Debt service coverage ratio : Lenders are interested in debt service coverage to judge the firms ability to pay off current interest and installments. Debt service coverage ratio = Earnings available for debt service Interest + Installments(c) Capital Gearing Ratio:In addition to debt-equity ratio, sometimes capital-gearing ratio is also calculated to show the proportion of fixed interest (dividend) bearing capital to funds belonging to equity shareholders.

Capital Gearing Ratio = Preference Share Capital + Debentures +Long Term Loan Equity Share Capital + Reserves & Surplus-Losses For judging long term solvency position, in addition to debt-equity ratio and capital gearing ratio, the following ratios are also used.

(i) Fixed AssetsLong Term FundIt is expected that fixed assets and core working capital be to be covered by long term fund. In various industries the proportion of fixed assets and current assets are different. So there is no uniform standard of this ratio too. But it should be less than one. If it is more than one, it means short-term fund has been used to finance fixed assets. Very often many companies resort to such practice during expansion. This may be a temporary arrangement but not a long-term remedy.(ii) Proprietary Ratio = Proprietary Fund Total Assets

DATA ANALYSIS AND INTERPRETATIONData AnalysisRATIOS OF SHIKSHAK SAHAKARI BANK (GENERAL)Profitability Ratios: -1. Return on capital employed: - = Net Profit 100 Capital employed Year 2014 = 2718367000100 Year 2015 = 3283872000100 1942786800019807509000

= 13.99 % = 16.57 %Year Ratio

2013-1413.99

2014-1516.57

Return on Capital employedThis ratio indicates the percentage of net profit to total capital employed. In 2013-14 net capital employed 13.99%, and in 2014-15 it was found 16.57, so there is an increased in that ratio. Therefore there is an increase in net profitReturn on equity: - Net Profit10 Equity Shareholders fund Year 2014 = 2718367000 100 Year 2015 = 3283872000100 17418860000 17815026000 = 15.60 % = 18.43 %

YearRatio

2013-1415.60

2014-1518.43

Return on Equity:-Return on equity found of bank was in the year 2014 15.60 and after the next year it was increased by 18.43. So we can say that bank is earning good in terms of return on equity.

Return on Total Assets: - = Net Profit10 Total AssetsYear 2014 = 2718367000 100 Year 2015 = 3283872000100 14503082000 23562116000 = 18.74 % = 13.93 %Year Ratio

2013-1418.74

2014-1513.93

RETURN ON TOTAL ASSETS:-Return on assets measures the profitability of the investment in a firm. In SHIKSHAK SAHAKARI BANK return on assets ratio was 18.74%, in 2013-14. In 2014-15 there was an increase in net profit, but as compare to net profit total assets had increased more than net profit. Therefore, the ratio has decreased to13.93%.As per the analysis we can say that organization can be able to increases its turnover and profit with little increase in the fixed assets, which can shows the efficiency of the organization.FINANCIAL RATIOSCurrent Ratios: -= Current Assets Current Liabilities Year 2014 = 45767933000 Year 2015 = 63617262000 44118302000 31473474000 = 1.45 = 1.44 YearRatio

2013-141.45

2014-151.44

Current Ratio: -As a conventional rule current ratio of 2 of 1 or more is considered satisfactory. SHIKSHAK SAHAKARI BANK has current ratio 1.45 in year 2013-14, which has been decreased by 1.44 in 2014-15 and. As per the analysis current assets like bank balance, deposits and cash are increased year by year. Current liabilities are also increased but not as current assets proportion.Proprietary Ratio: - = Proprietors Fund Total Assets Year 2014 = 6314208000 Year 2015 = 6297683000 390094727000481509413400= 0.016= 0.013YearRatio

2013-140.016

2014-150.013

PROPRIETARY RATIO:Proprietary ratio is the relationship between fixed assets and shareholders fund. Here total assets are exceeding the owners funds in year 2013-14 are 0.016, which is decreased in Year 2014-08 by 0.013. As compare to 2013-14 in 2014-15 owners fund decreased and the fixed assets increased therefore ratio decreased. Which indicates that organization can be increased its profit and owners share.Debt-Equity Ratio: - = Long term debt Shareholders Fund

19924830002009008000 Year 2014 = 17418860000 Year 2015 = 17815026000

= 8.94= 8.67 Year Ratio

2013-148.67

2014-158.94

DEBT EQUITY RATIO: In the year 2013-14 debt equity ratio is 8.67, which is increased in 2014-15 by 8.94. In 2013-14 debt is almost 8 times than equity, therefore organization has paid more on interest, which is not good for financial health of organization. But in 2014-15 it was increased, which means organization cannot able to improve share of equity

Ratio of Current Assets to Fixed Assets: - = Current Assets Fixed Assets Year 2014 = 45767933000 Year 2015 = 63617262000 2148990000 2204219000 = 21.29 = 28.86

YearRatio

2013-1421.29

2014-1528.86

Current Assets to Fixed Assets:-The current assets to fixed assets ratio was found in the year 2013-14 21.29, and in the next year it was found and increased by 28.86. So that tells us the proportion of the current assets to fixed assets which had increased in positive way.Net Profit to Fixed Assets: = Net Profit Fixed Assets Year 2014 = 2718367000 Year 2015 = 3283872000 214899000 2204219000 = 1.26 times =1.48 timeYear Ratio

2013-141.26

2014-151.48

Net profit to fixed assets:-The net profit to fixed asset ratio was in the Year 2014 was 1.26, and it had increase in the next Year 2015 by 1.48 that shows us that the net profit had increased in the right proportion to fixed assets which was good sign for the bank.

RATIO OF SHIKSHAK SAHAKARI BANK (BRANCH)Return on Total Assets: - = Net Profit100 Total Assets Year 2013 = 5004000100 Year 2014 = 6600000100 Year 2015 = 12400000100 235350000 322200000 475700000 = 2.12 = 2.04 = 2.60 YearRatio

2012-132.12

2013-142.04

2014-152.60

RETURN ON TOTAL ASSETS:-Return on assets measures the profitability of the investment in a firm. In SHIKSHAK SAHAKARI BANK return on assets ratio was 2.12 %, in 2013-14. In 2014-15 there was an increase in net profit, but as compare to net profit total assets had increased more than net profit. Therefore, the ratio has decreased to2.04%. And again it had increased in 2015 because of increase in Net profit; therefore there is an increase in ratio.As per the analysis we can say that organization can be able to increases its turnover and profit with little increase in the fixed assets, which can shows the efficiency of the organization.Current Ratio: - = Current Assets Current Liabilities Year 2013 = 139800000 Year 2014 = 205700000 Year 2015 = 319300000 66200000 88300000 120800000 = 2.11 = 2.32 = 2.64 Year Ratio

2012-132.11

2013-142.32

2014-152.64

Current Ratio: -As a conventional rule current ratio of 2 of 1 or more is considered satisfactory. SHIKSHAK SAHAKARI BANK has current ratio 2.11 in year 2012-13, which has been increased by 2.32 in 2013-14 and, again it had increase in 2014-15 by 2.64 because there is an increase in current assets. As per the analysis current assets like bank balance, deposits and cash are increased year by year. Current liabilities are also increased but not as current assets proportion. And there is an intensive investment in the assets, which will affect the performance of bank.Ratio of Current Assets to Fixed Assets: - = Current Assets Fixed Assets Year 2013 = 4800000 Year 2014 = 6000000 Year 2015 = 9100000 400000 35000 400000 = 15 = 13.71= 22.75Year Ratio

2012-1313.71

2013-1415.00

2014-1522.75

Ratio of Current Assets to Fixed Assets: -As this ratio shows the proportion of current assets to fixed assets, and its standard cannot be laid down.In 2013 the ratio is 13.71 and it had increased 2014 by 15. And again it had increased in 2015 by 22.75. Therefore, we can conclude this as in 2013 the position and trading was very good and in 2015 fixed assets have been used intensively.

Absolute Liquidity Ratio: = Cash at bank + Short term investments Current Liabilities

Year 2013 = 1600000 Year 2014 = 1900000 Year 2015 = 2400000 66200000 88300000 120800000 = 0.024 = 0.021 = 0.01YearRatio

2012-130.024

2013-140.021

2014-150.019

Absolute liquidity Ratio:-The absolute liquidity ratio was in the year 2012-13 0.024, and in next year it had decrease as 0.021in the 2013-14. And again in next Year 2014-08 it had decrease by 0.019, which shows bank had very less absolute liquid assets to convert in money, but on the other hand we can say that they had utilized their funds quite well.Deposits to Advances: - = Total Deposits Total Advances Year 2013 = 169150000 Year 2014 = 233900000 Year 2015 = 354900000 95200000 116100000 156000000 = 1.77 = 2.01 = 2.27 YearRatio

2012-131.77

2013-142.01

2014-152.27

Deposits to advances:-The ratio of deposits to advances in the year 2012-13 was 1.77, which had increased in the next year2013-14 were 2.01. And again in the next Year 2014-08 it had increased by 2.27. That shows the proportion of deposits in the terms of advances was quite good, and bank was able to provide loan to its customers.Net Profit to Fixed Assets: -= Net Profit Fixed Assets Year 2013 = 5004000 Year 2014 = 6600000 Year 2015 = 12400000 350000 400000 400000 = 14.29 times = 16.5 times = 31 timeYearRatio

2012-1314.29

2013-1416.50

2014-1531.00

Net Profit to Fixed Assets: -This ratio shows the proportion of Net profit to Fixed Assets.As we came to know the ratio was 14.29 times in Year 2013,and it had increased by 16.5 times in the Year 2014 and in the Year 2015 the Net profit increased almost 100% of the last year and the ratio also had increased rapidly to 31 times.Therefore, it seems branch is doing quite good business and growth also sufficient. ACTIVITY CHART

WeekActivity

1.Introduction to organization, Observation Of Finance process, Discussion of prospective topics.

2.Discussion of SIP, Finalization of SIP topic, Started collection of theoretical background.

3.Preparation of questionnaires, discussion with Bank employees regarding questionnaires, checking theoretical background.

4.Discussion with employees, checking internet websites of organization and others for theoretical background & literature review.

5.Collection of all secondary data i.e. annual report, company information etc.

6.Started typing for final copy of project, prepare graphs charts, Discussion with financial manager official about result of data analysis.

7.Forwarded mails for correction & recommendation to both ends. (organization guide, faculty guide)

8.Final graph prepare approval from organization guide, submitted to organization, changes were made according to faculty guide & submitted project.

KEY LEARNING

Finally, we came to the part of project, which is very important aspect of this Management study program.The final reference or conclusion can be drawn after studying overall performance of the SHIKSHAK SAHAKARI BANK.Key Learnings Are: -

The current ratio of the overall branches is quite satisfactory. Which had decreased in the Year 2014-15, but in the Branch the current ratio was 2.11 which is more than normal standard, and increasing in next years? The other financial ratios are found very good like net profit to fixed assets ratios is considered to be very good in both general as well as in Chandrapur Branch.

Return on total Assets ratio had seem to be very fluctuating in Chandrapur Branch and there seem to be ups and downs in this ratio. On the other hand, in general it had decreased from last year, but net profit was increased also.

The Chandrapur Branch had seen increased in deposits every year and therefore the ratios had also increased in year by year.

The current Assets to Fixed Assets ratio also had increased in every year, which is seen to be intensive use of the fixed assets in the proportion to current assets.

CONTRIBUTION TO THE ORGAISATION

I helped in banking day to day activities.

Helped to customer for the queries.

Organize the customer awareness campaign.

The branchs performance in terms of current ratio seems to be satisfactory, and performance found very good as current assets are found twice of the current liabilities. But they should look after it properly and should not invest excessive amount in current assets, because it will decrease profitability and large fund will block in working capital.

Return on total assets ratio found fluctuating, but there is an increase in Net Profit but excessive amount had invested in total assets it should be cut down.

The overall branches proprietary ratio was found to be unsatisfactory and therefore they should take some steps to make it sufficient. To increase the strength of the organization it is necessary to increase this ratio.

The current assets to fixed assets ratio was found increasing in both general as well as in the Chandrapur Branch. But they should not intensively use the fixed assets so much.

The absolute liquidity ratio had seen decreasing in year after year, and current liabilities had increased very rapidly which is a concern for the Branch. And they must look to avoid it to increase the profitability of the bank.

Reference

BOOKS

Financial Management Prassanna Chandra. Financial Management Satish Inamdar. Annual Report of Previous Two Years Shikshak Sahakari Bank.

WEBSITES: - Www.shikshaksahakaribank.com Www.wikipedia.com

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