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Finance:
Finance is the application of skills and care to manipulation, use and control of money. Finance has aptly been called the science of money. It deals with the principles and the method of money from those who have saved it and administrating it by those who control it passes. Finance is the process of converting accumulated funds to productive use. Different scholars have inter prated the term finance differently. Different views points on finance have categorized in to the 3 following major group. According to the first approach finance concerns with acquiring funds on reasonable terms and conditions to pay bills promptly. According to second approach to finance look on it as being concerned with cash. The third approach to finance looks on it as being concerned with procurement of funds and their wise application. Finance is one of the major elements, which activate the overall growth of the economy activity. A well-kit financial system directly contributes to the growth of the economy. An efficient financial system calls for the effective performance of institutions, financial instruments and financial markets. According to our present day economy, Finance is defined as the provision of the money at the time when it is required. Every enterprise whether it is small, medium or big needs finance to carry on its operations and to achieve its targets. In fact, finance is so indispensable today that it is called the lifeblood of an enterprise. Without adequate finance no enterprise can possibly accomplish its objectives.

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According to Bonneville and Dewey Finance consists of rising, providing and managing of all the money, capital or funds of any kind to be used in connection with business. A finance industry may be defined as the collection of organization that intermediate and facilities financial transactions individuals and institutions. The subject of finance has been classified in to two classes: a) Public finance b) Private finance

Public Finance:
The Public finance deals with the receipts and requirements and disbursement of funds in government institutions like states, central government and local selfgovernments.

Private Finance:
The Private finance is concerned with the receipts, requirements and disbursements of an individual and non-profit seeking business organization and non-profit organization. Personal or individual finance deals with the analysis of principles and practices involved in managing daily needs of funds.

Organization of Finance Department:

The organization structure of finance is an important functional department. Experts feel that finance has more significance than the other functional departments. It is established directly under the control of board of directors. The structure and the size of finance department differ from one industry to another
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industry. If the size of the industry is small, owners themselves will have the responsibility of finance function. If the size of the organization is big an individual finance department will be established. It may in form of centralized or decentralized unit. The top management controls the finance function, because the survival and growth mainly depends upon the sound financial decisions taken by the firm. The finance function, although is controlled by the top management. There will be a separate expert team look after their activities and this function will be subdivided according to the needs. A common structure of finance department cannot be evolved, as the size of the firm and nature of business vary from firm to firm. However a general organizational structure can be thought of: The finance function can be broadly dividend into two parts: 1) Routine matters or day to day functional transactions like custody of cash and bank accounts, collection of loans, payments of cash for transactions ect.

2) Special financial function like: Functional planning and budgeting Investment decisions Cost accounting Profit analysis Financial accounting Internal audit

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Finance Manager:
Finance manager is a person who heads the department of finance. He forms important activities in connection with each of the general functions of management. He groups activities in such a way that areas of responsibility and accountability are clearly defined. His focus is on profitability of the firm. The profit center is a technique by which activities are decentralized for the developed of strategic control point. The determination of nature and extend of staffing is aided by financial budgeting programmers. Planning involves heavy reliance on financial tools and analysis. Control requires the use of techniques of financial ratios and standard. Briefly, an informed and enlightened use of financial information is necessary for the purpose of co-coordinating the activities of an enterprise. Every business, irrespective of its size, should therefore, have a financial manager who has to take key decisions on the allocation of funds to various departments of the business. If the financial manager handles each of these tasks well, his firm is on top management; he should shape his decisions and recommendations to contribute to over all progress of the business. It is primarily objective, to maximize the value of the firm to its stockholders.

Functions of Finance Manager:

The following are some of the important functions of the finance manager: He should anticipate and estimate the total financial requirements of the firm. He has to select the right sources at the right time and at the right cost. He has to allocate the available funds in the profitable avenues.
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He has to maintain liquidity position of firm at the peak. He should analyze financial performance and plan for its growth. He has to administrate of working capital management. He has to protect the interest of creditors, shareholders and employees. He has to concentrate more on fulfilling the social obligation of business unit.

Financial Management:
Financial management as an academic discipline, has undergone, fundamental changes with respect to its scope and coverage. In the early years of its evolution, it was treated synonymously with the raising of funds. In the current literature pertaining to these growing disciplines, a broader scope, so as to include in addition to procurement of funds efficient use of resource is universally recognized. The academic is thinking with respect to the objects of financial management and also characterized by a change over the years. Financial management is the area of business management devoted to a judicious use of capital and a careful selection of sources of capital in order to enable a business firm to move in the direction of reaching its goal. It is a managerial activity, which is concerned with the planning and controlling of the firms financial resources. As a separate activity on discipline it is of recent origin. It was a branch of economics till 1890. Still today, it has no unique body of knowledge of its own, and draws heavily on economics for its theoretical concepts.

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The company is made to know of cash. Management, inventory management, ratio analysis account receivable management, working capital finance, the customer delight, through proper observations findings, to enhance its strength over the activities of financial management and service, where it is a need. As the company is not so aware about the above aspects, I have taken an opportunity to suggest the company, over its activities regarding financial management to the customers, which help the company to enhance its sales, the financial strength over the period of time, which helps me apply the theoretical Study into practical to gain exposure about the activities of the company and gain experience over companies. Financial management helps the company to know where the funds will be obtained, in what amount fund would be raised, how much to invest in a particular work, how to plan the proper utilization of the available fund and also to avoid the misuse of available fund.

Definitions of Financial Management:

According to Professor EZIRA SOLOMAN Financial management has concerned with the efficient use of and important economic resources namely capital funds. The company is made to know of cash. Management, inventory management, ratio analysis account receivables management, working capital finance, the customer delight, through proper observations and findings, to enhance its strength over the activities of financial management and services, where it is a need. According to PHILIPPTOS Financial management is concerned with the managerial decision, the results in the acquisitions and financing of long term and short term assets for the company. As such it deals with the situation that requires
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the selection of specific assets, selection of specific liability as well as the problem of size and growth of enterprise. The analysis of these decisions is based on the expected and inflow and outflow of funds and their effects upon managerial objectives. Financial management has concerned with the efficient use of and important economic resources namely capital funds. Financial management is concerned with the managerial decision that results in the acquisitions and financing of long term and short term assets for the company. As such it deals with the situation that requires the selection of specific assets, selection of specific liability as well as the problem of size and growth of enterprise. The analysis of these decisions is based on the expected and inflow and outflow of funds and their effects upon managerial objectives. Financial management is the area of business management devoted to a judicious use of capital and a careful selection of sources of capital in order to enable a business firm to move in the direction of reaching its goal. It is a managerial activity, which is concerned with the planning and controlling of the firms financial resources. As a separate activity on discipline it is of recent origin. It was a branch of economics till 1890. Still today, it has no unique body of knowledge of its own and draws heavily on economics for its theoretical concepts.

Objectives of Financial Management:

The objectives provide a framework for optimum financial decision-making. In other words they are concerned with designing a method of operating the internal investments and financing of a firm. We discuss in this section the alternative approaches in financial literature.

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Financial management of any business firm has to set goals for and to interpret them in relation to the objectives of the firm. Broadly there are only two alternatives goals/objectives of financial management. The goals/objectives of financial management can be broadly classified into two categories namely: 1) Primary objectives 2) Secondary objectives

Primary objective: 1) Maintenance of adequate liquid assets of the company: Maintenance of adequate liquid assets in the company is one of the basic objectives of financial management. This objective implies the financial management should ensure the availability of adequate fund in the hands of the organization throughout to meet its obligations. 2) Profit maximization: Profit earning is the main aim of every economic activity. A business being an economic institution must earn profits to cover its costs and provide funds for growth. No business can survive without earning profits. Profits also serve as a measure of efficiency of a business enterprise. The accumulated profits enable a business to face risks like fall in prices, competition from other units, adverse government policies etc. Thus profit maximization is considered as the main objective of business.

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3) Wealth maximization: It is the appropriate objective of an enterprise. Wealth maximization guides the management in framing consistent strong dividend policy to reach maximum returns to the equity holders. Financial theory asserts that wealth maximizes the stockholders wealth; the individual stockholders can use this wealth to maximize his utility. It means that by maximizing stockholders wealth the firm is operating consistently towards maximizing stockholders utility. Secondary objectives: 1) Ensuring maximum operational efficiency through proper planning, implementing and controlling the utilization of funds that is through the effective employment of funds. 2) Enforcing financial management disciplines in the use of financial management through the co-ordination of the operations of various departments in the organizations. 3) Building up adequate reserves for financial growth and expansions. 4) Ensuring a fair retain of the shareholders of their investments.

Importance of Financial Management:

1) Finance is the lifeblood of business. Every business unit needs money and it happen only when it is managed properly. That means sound financial management is absolutely necessary for every business units, which wants to make more money.

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2) Bad production management and bad sales management make stain in hundreds but faculty finance is changing thousands- says Collin Brooks, who elucidates has important, it is to manage the flow of funds in an organization. 3) Financial management helps a company in making the effective employment of funds by away fixed assets that is, fixed capital as well as current assets that is working capital. 4) Financial management helps a company that is optimizing the output from given input of funds. 5) Financial management helps a company n profit planning, capital budgeting, controlling, inventories and account receivables etc. 6) Financial management is important even for non-profit making organization as it helps them to control the costs and to use the funds at their disposing the most useful manner. 7) Where the funds will obtained, in what amount fund would be raised, how much to invest in a particular work, hoe to plan the proper utilization of the available fund and also to avoid he misuse of available fund. 8) Financial management is absolutely necessary for every business unit, which wants to make money. 9) Financial management helps the company to optimize the output from the given input of funds, and helps a company in profit planning. 10) Financial management is very important to manage the flow of funds in an organization.

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Financial Management Process:

The financial management process begins within the financial planning and decisions. While implementations of these decisions the firm has to acquire certain risk and return characteristic. These characteristics determine the market process must include the feedback system to enable it take corrective measures if required

Decisions in Financial Management:

1) Investment decision: Capital expenditure and revenue expenditure. 2) Financing decision: Long term and short term. 3) Dividend decisions: Increased dividend and increased capital gain. 4) Current asset management: Continuous flow of materials and money and maintaining liquidates.

As of Financial Management:
Anticipating financial needs Acquiring financial resources Allocating fund in business Administrating the allocation of funds Analyzing the performance of finance Accounting and reporting to the management

Meaning of financial statements:

A Financial statement is an organized collection of data according to logical and consistent accounting procedures. Its purpose is to convey an understanding of
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some financial aspects of a business firm. It may show opposition at a movement of time as in the case of balance sheet, or may reveal a series of activities over a given period of time. A financial statement is an organized collection of data according to logical and consistent accounting procedures. Its purpose is to convey an understanding of some financial aspects of a business firm. It may show opposition at a movement of time as in the case of balance sheet, or may reveal a series of activities over a given period of time. Thus, the term financial statement generally refers to two basic statements: Income statement or balance sheet Profit and loss account

Balance sheet:
The balance sheet shows the financial condition of a business at a given point of time, in terms of assets and liabilities. Assets are classified into the following categories: 1) Fixed assets 2) Investments 3) Current assets 4) Loans and advances 5) Miscellaneous expenditures and losses.

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Liabilities are classified as follows: 1) Share capital 2) Reserves and surplus 3) Secured loans 4) Unsecured loans 5) Current liabilities and provisions As per the companies act, the balance sheet of the company shall be in either the horizontal form or the vertical form.

Profit and loss account:

The profit and loss account technically is an adjunct to the balance sheet because it provides details relating to net profit, which reprints the change in owners equity. Yet, in practice it is often considered to be more important than the balance sheet because the details of revenues and expenses is provided in the profit and loss account shed considerable light on the performance of the business. There is no prescribed standard format to make this account. However, the companies act does require that the information provided should be adequate to reflect a true and a fair picture if the operation of the company for the accounting period. The important items in the profit and loss account are: Net sales Cost of goods sold Gross profit Operating expenses Operating profit Non-operating surplus/deficit Profit before interest and tax
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Interest Profit before tax Profit after tax

To these statements are added the statement of retained earnings and some other statements (as fund flow statements, cash flow statements etc) and schedules of fixed assets (as investments, current assets etc). All these statements are collectively called as package of financial statements.

Statement of Retained Earnings:

It is also termed as profit and loss appropriation account. The statements or the account gives details of the distribution of earnings during a particular accounting period. The balance shown by the income statement is transferred to the balance sheet through these statements after making necessary appropriations. The balance of this account represents the retained earnings that is, accumulated excess of earnings over losses and dividends. The statements are connecting link between the balance sheet and income statements.

Nature of Financial Statements:

a) These are reports or summarized reviews about the performance, achievements and weakness of the business. b) These are prepared at the end of the accounting period so that various parties may take decision of their future actions in respect of the relationship with the business.

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c) The reliability of financial statements depends on the reliability of accounting data. These statements cannot be said to be true and fair representative of the strength or profitability of the concerned if there are numerous frauds and defalcations in the accounts. d) There may be certain developments and factors, which may be very important for the business, are not taken into account, as these are not recorded in the routine of accounting. e) These statements are prepared as per accounting concepts and conventions.

Significance of Financial Statements:

1) OWNERS: The owners provide funds for the operations of a business and they want to know whether their funds are being properly utilized or not. The financial statements prepared from time to time satisfy their curiosity. 2) INVESTORS: Prospective investors, who want to invest money in a firm, would like to make an analysis of the financial statements of that firm to know how safe proposed investment will be. 3) GOVERNMENT: Central and state governments are interested in the financial statements because they reflect the earnings for a particular period for purposes of taxation. Moreover, these financial are used for compiling statistics concerning business, which in turn, help in compiling national accounts. 4) CONSUMERS: Consumers are interested I the establishment of good accounting control so that cost of production may be reduced with the resultant reduction of the prices of goods they buy.

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Limitations of Financial Statements:

1) Interim and not final reports: Financial statements do not depict the exact position and are essentially interim reports. 2) Lack of precision and definiteness: Financial statements may not be realistic because these are prepared by following certain basic concepts and conventions. 3) Lack of objective judgments: Financial statements are influenced by the personal judgments of the accountant. 4) Record only monetary facts: Financial statements disclose only monetary facts that are those transactions are recorded in the books of accountants, which can be measured in monetary terms. 5) Artificial view: These statements do not give a real and correct report about the worth of the assets and their loss of value as these are shown on historical cost basis. 6) Scope of manipulations: These statements are sometimes prepared according to the needs of the situation or the whims of the management.

Analysis of Financial Statements:

Analysis is the process of critically examining in detail accounting information given in the financial statements. For the purpose of analysis, individual items are studied: their interrelationship with other related figures established, the data is sometimes rearranged to have better understanding of the information with the help of different techniques or tools for the purpose. Analysis financial statements is a process of evaluating relationship between component parts of financial

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statements to obtain a better understanding to obtain a better understanding of firms position and performance. In the words of Myer, Financial statements analysis is largely a study of relationship among the various financial factors in a business as disclosed by a single set of statements and a study of the trend of these factors as shown in a series of statements.

Financial Performance:
Financial performance is about knowing how the firm is doing and what its financial condition is. The stakeholders of a firm, viz. shareholder, creditors, suppliers, managers, employees, tax, authorized and others are interested in broadly knowing about the firms financial conditions. Of course, their specific concerns may differ. Trade creditors and short-term liquidity of the firm and its ability to pay is due in next 12 months or so on. Term lending institution and debentures holders have a relatively longer time horizon and are concerned about the ability of the firm to services its debt over the next five to ten years. Long-term shareholders and mangers that want to make a career with the firm are interested in the profitability and growth of the firm over an extended period of time. To understand the financial performance and condition of a firm, its stakeholders look at their financial statements: a) The Balance sheet b) The profit and loss account c) The sources and uses of funds statements
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Financial Analysis:
The term financial analysis is also known as the analysis and interpretation of financial statement refers to the process of determining financial strength and weakness of the firm establishing strategic relationship between the items of the balance sheet, profit and loss account and operative data.

Definition of Financial Analysis:

According to Metalf and Titard, It is a process of evaluating the relationship between components part of a financial statement to obtain a better understanding of a firms position and performance. In the words of Myers Financial statements analysis is largely a study or relationship among the various financial factors in a business as described by a single set of statements and a study of the trend of these factors as shown in a series of statements.

Needs of Financial Analysis:

Lenders need financial analysis for carrying out the following: Technical Appraisal Commercial Appraisal Financial Appraisal Economic Appraisal Management Appraisal

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Uses of Financial Analysis:

1) The present and future earning capacity or profitability of the concern. 2) The operational efficiency of the concern as whole and of its various parts or departments. 3) The short-term and long-term solvency of the concern for the benefit of the debenture holders and trade creditors. 4) The financial stability of the business concern. 5) The long-term liquidity of its funds.

Techniques of Financial Analysis:

The analysis and interpretation of financial statements 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. They are as follows:

1) Comparative financial statements:

Comparative financial statements are those statements that have been so designed in a way so as to provide time perspective to the consideration of various elements of financial position embodied in such statements. In these statements, figures for two or more periods are placed side by side to facilitate comparison. Both the income statements and balance sheet can be prepared in the form of comparative financial statements.

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a) Comparative income statement: The income statement discloses net profit or net loss on account of operations. A comparative income statement will show the absolute figures for two or more periods, the absolute change from one period to another and if desired the change in terms of percentage. Since the figures for two or more periods are shown side by side, the reader can quickly ascertain whether sales have increased or decreased, whether cost of sales has increased or decreased etc. Thus, only a reading of data include in comparative income statements will be helpful in deriving meaning full conclusions.

b) Comparative balance sheet: The comparative balance sheet as on two or more different dates can be used for comparing assets and liabilities and finding out any increase or decrease in those items. Thus, while in a single balance sheet the emphasis is on present position, it is on change in the comparative balance. Such a balance sheet is very useful in studying the trends in an enterprise. Comparative financial statements can be prepared for more than two periods or on more than two decades. However, it becomes very cumbersome to study the trend with more than two period data.

2) Common size financial statements:

Common size financial statements are those in which figures reported are comforted into percentage to some common base. In the income statement the sales figures is assumed to be 100 and all figures are expressed as a percentage

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of sales. Similarly in the balance sheet the total of assets or liabilities is taken 100 and all the figures are expressed as a percentage of this total. a) Common size balance sheet: In the common size balance sheet, total assets or liabilities is taken as 100 and all the figures are expressed as percentage of total. Comparative common size balance sheet for different period helps to highlight the trends in different items.

b) Common size income statements: In such statements, sales figure is assumed to be equal to 100 and all other figures of cost or expenses are expressed as a percentage of sales. Comparative income statements for different periods help to reveal the efficiency or otherwise have incurring any cost or expenses.

3) Trend percentages:
Trend percentages are immensely helpful in making a comparative study of financial statements for several years. The method of calculating trend percentages involves the calculation of percentage relationship that each item bears to the same item in the base year. Any year item may be taken as the base year. Each item of the base year is taken as 100 and on that basis the percentages for each of the items of each of the years are calculated. These percentages can be taken as index numbers showing the related changes in the financial data resulting with the passage of time. The method of trend percentages is a useful, analytical device for the management since by substitution of percentages for large amounts; the brevity and readability are achieved. However, trend percentages are not calculated for all the items in the

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financial statements. They are usually calculated for major items since the purpose is to highlight important changes.

4) Funds flow analysis:

Fund flow analysis has become an important tool in the analytical kit of financial analysis; credit granting institution and financial managers. This is because the balance sheet of a business reveals its financial status at a particular point of time. It does not sharply focus those major financial transactions, which have been behind the balance sheet changes. Fund flow analysis reveals the changes in working capital position. It tells about the source from which it was used. It brings out in open the change, which have taken place behind the balance sheet. Working capital being the lifeblood of the business such an analysis is extremely useful growth of the business.

5) Cost volume profit analysis:

Cost volume profit analysis is an important tool of profit planning; it studied the relationship between cost volume of production, sales and profit. Of course it is not strictly a technique used for analysis of financial statements. It is an important tool for the management for decision making from the data provided by both cost and financial records. It tells the volume of sales at which the firm will breakeven, the effort on profit on account of variation in output, selling prices and cost, and finally, the quantity to be produced and sold to reach the target profit level.

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6) Cash flow analysis: This statement is prepared to know clearly the various items of inflow and outflow of cash. It is an essential tool for short-term financial analysis and is very helpful in the evaluation of current liability of a business concern. It helps the business executives in efficient cash management and the internal financial management.

7) Ratio analysis: Ratio analysis is a technique of calculation of number of accounting ratios from the data found in the financial statements, the comparison of these accounting ratios with those of the previous years or with those of others concerns engaged in similar line of activities or with those of standard ratios and interpretation of its comparison. Ratio analysis means a tool used by individuals to conduct a quantitative analysis of information in a company's financial statements. Ratios are calculated from current year numbers and are then compared to previous years, other companies, the industry, or even the economy to judge the performance of the company. Ratio analysis is predominately used by proponents of fundamental analysis.

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RATIO ANALYSIS Meaning of Ratio:

The term ratio refers to expressing the relationship between two quantities of the same kind. In other words, it expresses one number in terms of another number. It is a measure of the relationship between two magnitudes. It may be defined as the indicated quotient of two mathematical expression of the quant able between two numbers. Ratio analysis means a tool used by individuals to conduct a quantitative analysis of information in a company's financial statements. Ratios are calculated from current year numbers and are then compared to previous years, other companies, the industry, or even the economy to judge the performance of the company. Ratio analysis is predominately used by proponents of fundamental analysis. Its a tool, which enables the banker or lender to arrive at the following factors: Liquidity position Profitability Solvency Financial Stability Quality of the Management Safety & Security of the loans & advances to be or already been provide.

A ratio is a simple arithmetical expression of the relationship of one number to another. According to ACCOUNTANTS HANDBOOK by WIXON, KELL and

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BEDFORD, A ratio is an expression of the quantitative relationship between two numbers. The ratio analysis is one of the most powerful tools of financial analysis. It is the 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 can be made more effectively. A financial ratio is the relationship between two accounting figures expressed mathematically. In simple terms it is one number expressed in terms of another and can be worked out by dividing one number into the other. Therefore ratio analysis is a tool to present the figures of financial statements in simple, concise and intelligible form. Ratio analysis, in this way is the process of establishing meaningful relationship between two figures or set of figures of financial statements

Nature of Ratio Analysis:

Ratio analysis is a technique of analysis and interpretation of financial statements. It is the process of establishing and interpreting various ratios for helping in making certain decisions. It is a means of better understanding of financial strengths and weakness of a firm. The following are the four steps involved in the ratio analysis: 1) Selection of relevant data from the financial statements depending upon the objectives of the analysis. 2) Calculation of appropriate ratios from the above data. 3) Comparison of calculated ratios with the ratios of the same firm in the past, or the ratios developed from projected financial statements or the
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ratios of some other firms or the comparison with ratios of the industry to which the firm belongs. 4) Interpretation of the ratios.

Interpretation of the Ratios:

The interpretation of ratios is an important factor. Though calculation of ratios is also important but it is only a clerical task whereas interpretation needs skill, intelligence and foresightedness. The interpretation of the ratios can be made in the following ways: 1) Single Absolute Ratio: Generally speaking one cannot draw any meaningful conclusion when a single ratio is considered insulation. But single ratio may be studied in relation to certain rules of thumb which are based upon well proven conventions are for examples 2:1 is considered to be a good ratio for current assets to current liabilities.

2) Group of Ratios: Ratios may be interpreted by calculating a group of related ratios. A single ratio supported by other related additional ratios becomes more understandable and meaningful. For example, the ratio of current assets to current Liabilities may be supported by the ratio of liquid assets to liquid liabilities to draw more dependable conclusions.

3) Historical Comparison: One of the easiest and most popular ways of evaluating the performance of the firm is to compare its present ratios with

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the past ratios called comparison overtime. When financial ratios compared over a period of time, it gives an indication of the direction of change and reflects whether the firms performance and financial position has improved, deteriorated or remained constant over a period of time. But while interpreting ratios from comparison over time, one has to be careful about the changes, if any, in the firms policies and accounting procedures.

4) Projected Ratios: Ratios can also be calculated for future standards based upon the projected or Performa financial statements. These future ratios may be taken as standard for comparison and the ratios calculated on actual financial statements can be compared with the standard ratios to find out variance, if any. Such variances help in interpreting and taking corrective action for improvement in future.

5) Inter-firm Comparison: Ratios of one firm can also be compared with the ratios of some other selected firms in the same industry at the same point of time. This kind of comparison helps in evaluating relative financial position and performance of the firm. But while making use of such comparison one has to be very careful regarding the different accounting methods, policies and procedures adopted by different firms.

Ways of Ratio expressed:

As Percentage - such as 25% or 50%. For example if net profit is Rs.25, 000/- and the sales is Rs.1, 00,000/- then the net profit can be said to be 25% of the sales.
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As Proportion

- The above figures may be expressed in terms of the

relationship between net profits to sales as 1: 4. As Pure Number /Times - The same can also be expressed in an alternatively way such as the sale is 4 times of the net profit or profit is 1/4th of the sales.

Significance of Ratio Analysis:

Helps in decision making Helps in financial forecasting and planning Helps in communication strength and weakness of the firm Helps in co-ordination Helps in control Useful in budgetary control and standard costing

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Uses of Ratio Analysis:

Ratio analysis simplifies the understanding of financial statements. Ratio analysis establishes the inter-relationship between the he various financial figures. Ratio analysis is an instrument for diagnosing the financial health of the business Ratio analysis facilitates inter-firm and intra-firm comparison. Ratio analysis is invaluable aid to the management in the efficient discharge of its basic functions. Ratios are very helpful in establishing standard costing system and budgetary control system. Ratio analysis is useful not only to the management but also to the outsiders like creditors investors banks and other financial institutions.

Objectives of Ratio:
1) Measurement of the profitability 2) Judging the operational efficiency of management 3) Assessing the efficiency of the business 4) Measuring short and long term financial position of the company 5) Facilitating comparative analysis of the performance 6) Indicator of true efficiency 7) Helpful in budgeting and forecasting 8) Helpful in simplifying accounting figures

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Limitations of Ratios Analysis:

Ratios are calculated from the financial statements. The financial statements are suffering from a number a number of limitations. The ratios derived from such financial statements are also subject to those limitations. There is no consistency in the meaning of certain accounting ratios. There is a danger of window dressing (that is showing the position in a favorable manner than what actual it is) in ratio analysis. Ratios become meaningless if they detached from the details from which they are derived. Rations alone are not adequate for judging the financial position of the business. Ratios are tools of quantitative analysis only. Qualitative aspects such as efficiency, honesty etc are ignored in ratio analysis. Ratios may give misleading impression especially to a layman.

Classifications of Ratios:
As there are many ratios, they may be classified into different categories. According to some writers, there are as many as 429 business ratios. But all these ratios need not be calculated at a time. Depending upon the nature of the business, purpose of the analysis, and the particular questions to be answered from ratio analysis, certain ratios are generally selected. Ratios may be classified on different bases depending on their nature, importance, source and function.
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On the basis of their nature: on the basis of the nature of items. The relationships of which are explained by the ratio, they may be classified as financial ratio and operating ratios financial ratio deal with items, which are financial [or non-operational] in nature current ratio. Quick ratio, Debt-equity ratio etc, are examples s of financial ratio. On the other hand the operating ratios explain the relationship between items of operations of the enterprise. Turnover ratios, earning ratios expenses ratios, etc are examples of these ratios. On the basis of their importance: ratios may also be classified on the basis of their importance as primary ratios and secondary ratios. Operating profit to operating capital employed is generally described a primary ratio. Other related ratios under this category are net sales to capital employed, operating profit to value of production etc. on the other hand, some examples of secondary ratios of direct material cost to value of production, ratio of output to factory employees, etc. On the basis of their function: ratio con also be classified on the basis of the purpose served or function, which the ratios are expected to perform. This basis of classification is called functional classification and the ratios called functional ratios. In fact, this the most commonly adopted classifications of ratios. Examples of functional ratios are liquidity ratios, solvency ratios, turnover ratios and profitability ratios. On the basis of source of data: on the basis of the source from which they are calculated, ratios may also be classified into three categories: 1) Balance sheet ratios 2) Profit and loss account ratios
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3) Combined ratios

Balance sheet ratios deal with the relationship between two items or groups of items contained in balance sheet and they generally indicate short-term or long-term financial position of business. Profit and loss account ratios deals with the relationship between items or group of items contained in profit and loss account. They generally indicate the profitability and efficiency of control over expenses of the business. Combined ratios deal with the relationship between items or group of items contained in both profit and loss account and balance sheet. They generally indicate the operational efficiency of the business.

Types of Ratios: Balance sheet ratios: 1) Current ratio:

Current ratio establishes the relationship between current assets and current liabilities. The difference between current assets and current liabilities is known as working capital. Therefore, the current ratio is also called working capital ratio. The purpose of this ratio is to find out the extend of current assets available against each rupee of current liability of the firm. Current ratio=Current assets/current liabilities Interpretation: The current ratio reveals the ability of the firm to meet all the obligations maturing within a year. Conventionally it is said that the current ratio

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should be 2:1. It means that for every one rupee for current liability the firm must have to rupee worth of current assets. The reason for this conventional norm is that, all the current assets cannot be converted into cash immediately.

2) Liquid ratio:
Liquid ratio is also called quick ratio or acid test ratio. It established=s the relationships between liquid assets are those which can be converted into cash without any loss or delay. All current assets, excepting stock and prepaid expenses, are considered to be liquid assets. Liquid liabilities are those liabilities which are payable immediately. All current liabilities, excepting bank overdraft, are considered to be liquid liabilities. Liquid liabilities Interpretation: Generally, a quick ratio of 1:1 is considered to be satisfactory, because it takes into account only liquid assets whose realizable value is almost certain. A firm with 1:1 quick ratio is expected to be able discharge all its current obligations. ratio=Liquid assets/liquid

3) Absolute liquid ratio:

Absolute liquid ratio establishes the relationship between absolute liquid assets and liquid liabilities. Absolute liquid assets include cash in hand, cash at bank and marketable securities.

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Absolute liabilities

liquid

ratio=Absolute

liquid

assets/liquid

Interpretation: Generally, an absolute liquid ratio of 0.5:1 is considered to be satisfactory.

4) Debt-equity ratio:
Debt-equity ratio shows the relationship between borrowed funds and owners funds. The purpose of this ratio is to show the extend of the firms dependence on external liabilities. In order to calculate its ratio, the required components are external liabilities and owners equity. External liability includes both long-term as well as short-term borrowings. He term owners funds include equity share capital, preference share capital., reserves and surplus, but excludes past accumulated losses such preliminary expenses, discount on issue of share or debentures, underwriting commission and profit and loss account debit balance ect. Debt-equity debt/equity Debt-equity ratio=total debt/equity Interpretation: For analyzing the capital structure, debt-equity ratio gives an idea about the relative share of funds of outside and owners invested in the business. The ratio of long-term debt of equity is generally regarding as safe if it is 2:1. ratio=long term

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5) Proprietary ratio:
Proprietary ratio shows the relationship between owners equity and total assets of the firms. This ratio is also known as equity ratio or net worth to total assets ratio. The purpose of this ratio is to indicate the extend of owners contribution towards the total value of assets. In, other words, it gives an idea about the extent to which the owners own the firm. The components required to compute this ratio are proprietors funds and total assets.

Interpretation: There is no definite norm for this ratio. Some financial experts hold the view that proprietors funds should be 33% to 55% of the total capital employed and outsiders fund should from 67% to 50% of the total assets.

Profit and loss account ratio: 1) Gross profit ratio:

Gross profit ratio is the ratio, which establishes the relationship between gross profit and net sales. This is also known as gross profit to sales ratio. This ratio is useful particularly in the case of wholesale and retail trading firms. Its purpose is the shown the amount of gross profit generated for each rupee of sales. Gross profit ratio=Gross profit /net

sales*100

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Interpretation: A high margin enables all operating expenses to be covered and provide a reasonable return to the shareholders. In order to keep the ratio high, management has to minimize cost of goods sold and improve sale performance.

2) Net profit ratio:

Net profit ratio is also called net profit to sales ratio and explains the relationship between net profit after taxes and net sales. Net profit ratio=Net profit after taxes/net

sales*100 Interpretation: It is a measure of overall profitability of the firm. The higher the ratio, the greater would be the returns to the shareholder and vice versa. A net profit margin of 10% is considered normal. This ratio is very useful to control cost and to increase the sales.

3) Operating ratio: Operating ratio establishes the relationship between operating cost and sales. Operation sales*100. Interpretation: The operating ratio shows the overall operating efficiency of the business. High operating ratio is undesirable as it leaves a small portion of income to meet other non-operating expenses like interest on loans. A low ratio is better
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ratio=

operation

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and reflects the efficiency of the management. The lower ratio, the higher would be the profitability.

4) Operating profit ratio:

Operating profit ratio studies the relationship between operating profit (that is EBIT-Earnings before Interest and Tax) and sales. The purpose of this ratio is to find out the amount of operating profit for each rupee of sales. Operating sales*100. Interpretation: A high ratio is an indicator of the operational efficiency and a low ratio stands for operational inefficiency of the firm. profit ratio=Operating profit/net

Combined ratios:
The ratio which is calculated by taking one item or one group of item form trading and profit and loss account and another item or the group of another item is taken from balance sheet is called mixed ratio. Some of the important mixed ratios are:

1) Debtor turnover ratio:

Debtor turn over ratio shows the relationship between credit sales and debtor. In other words, it indicates the number of times on an average the debts are collected in year.

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Debtors turnover ratio=credit sales/average debtors or debtors. Interpretation: A high debtors turnover ratio reflects short collection period and indicates that debtors are prompt in their payment. On the contrary, a low debtors turnover ratio or a high collusion period implies that debtors pay their dues very slowly.

2) Debt collection period ratio:

The debt collection period ratio indicates the average numbers of days that the firm has to wait for collecting the money after goods are sold on credit. This ratio is also known as average collection period ratio or debtors velocity ratio. Debt collection period ratio=Average debtors/credit sales*365.

3) Creditors turnover ratio:

Creditors turnover ratio establishes relationship between credit purchases and average creditors. The purpose of this ratio is to know the speed with which payments are made to the creditors. Creditors turnover ratio=Credit purchases/average creditors Interpretation: The shorter the turnover ratio, the longer would be the average payments period and vice versa.

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4) Debt payment period ratio: Debt payment ratio indicates the number of days that the firm can postpone, on an average, its payments to the creditors. This is also known as creditors velocity ratio. Debt payment ratio=Average creditors/credit purchases*365.

5) Total assets turnover ratio:

Total assets turnover ratio establishes the relationship between sales and total assets. The purpose is to judge weather the firm is generating adequate sales from the total assets employed. Further, it is also used to determine whether there is adequate investment, or over investment or under investment in assets of the firm. Total assets turnover ratio=Sales/total assets Interpretation: A high ratio is an indication of efficient utilization of assets in generating sales and a low ratio is an index of inefficient utilization of assets.

Ratios used for the study:

1) Cost of deposits 2) Cost of funds 3) Yield on advances 4) Net interest margin (on average earning assets)
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5) Credit deposit ratio 6) %Low cost deposit to total deposit 7) Cost income ratio 8) Return on average assets 9) Return on equity 10) Net interest income/Total income 11) Other income/Total income 12) Staff cost/Total income 13) Gross NPA ratio 14) Net NPA ratio 15) Capital adequacy ratio 16) Net profit to average working funds

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INDIAN BANKING STURUCTURE:

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Introduction to bank:
The name bank derives from the Italian word bancodesk/bench, used during the Renaissance by Florentines bankers, who used to make their transactions above the desk covered by a green table cloth. However, there are traces of banking activity even in ancient times. In, fact the word traces its origin back to the Ancient Roman Empire, where money lenders would set up their stalls in the middle of the enclosed courtyards called macella on a long bench called a bench, from which the words banco and bank are derived. As a moneychanger, the merchant at the banco did not so much invest money as merely convert the foreign currency into the only legal tender in Rome that of the imperial mint.

Meaning of bank:
Bank is an institution, which deals with money and credit. It borrows money by accepting deposits from the public and lend to those who are in needs of funds. It also helps the businessmen in receiving and making payments. A bank is a financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money. It is an institution for

receiving, keeping, and lending the money. The first modern bank was founded in Italy in Genoa in 1406, [citation needed] its name was Banco di San Giorgio (bank of St.George). Banking industry has revolutionized the transaction and financial services system worldwide. Through the development in technology banking services has been

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vailed to the customers at all times, even after the normal banking hours, on a 24/7 basis. Banking industry services is nothing but the access of most of the banking services (such as verification of account details, going with the transaction, etc.). In todays world, progress of online services is available to all customers of the concerned bank and can be accessed at any point of time and from anywhere provided the place is equipped with the internet facility. Now a day, almost all the banks all over the world, especially the multinational ones, provide their customers with online banking facility.

Definition of bank:
According to Herbert.L.Hart, The banker is a person or company carrying on the business of receiving money and collecting drafts for customers subject to the obligation of honoring the cheque drawn upon him from time to time by customers up to the amount available on their current account. Receiving money on current account Paying against cheque drawn by account holders Collecting of draft on behalf of the customers According to the bank regulation act 1949 section(1)(bandc) a bank is the accepting of for the purpose of lending or investing of deposits of money from the public repayable on demand or other and with drawl by cheque, draft, or order form.

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According to John Paget suggest that a bank is an institution which: Take deposits account Take current accounts Issues and pays cheques

Main functions of bank:

Borrowing Lending Agency service General service

Indian banking industry:

The Indian Banking industry, which is governed by the Banking Regulation Act of India, 1949 can be broadly classified into two major categories, non-scheduled banks and scheduled banks. Scheduled banks comprise commercial banks and the co-operative banks. In terms of ownership, commercial banks can be further grouped into nationalized banks and private sector banks (the old/new domestic and foreign). These banks have over 67000 branches spread across the country. The first phase of financial reforms resulted in the nationalization of 14 major banks in 1969 and resulted in a shift from class banking to mass banking. This in turn resulted in a significant growth in the geographical coverage of banks. Every bank had to earmark a minimum percentage of their loan portfolio to sectors identified as priority sectors. The manufacturing sector also grew during the
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1970s in protected environs and the banking sector was a critical source. The next wave of reforms saw the nationalization of 6 more commercial banks in 1980. Since then the number of scheduled commercial banks increased in four-fold and the number of bank branches increased eight-fold. After the second phase of financial sector reforms and liberalization of the sector in the early nineties, the public sector banks (PSB) found it extremely difficult to compete with the new private sector banks and foreign banks. The new private sector banks first made their appearance after the guidelines permitting them were issued in January 1993. Eight new private sector banks are presently in operation. The bank due to their late start have access to state-of-the art technology, which in turn helps them to save on manpower cost and provide better services.

Evolution of banking industry in India:

Banking in India originated in the last decades of the 18th century. The first banks were the General Bank of India, which started in 1786, and the bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the bank of Calcutta in June 1806, which almost immediately became the bank of Bengal. This was one of the presidency banks, the other two being the bank of Bombay and bank of Madras, all were of which were established under charters from the British East India company. For many years the presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1925 to form the Imperial Bank of India, which, upon, Indias independence, became the State bank of India. The first fully Indian owned bank was the Allahabad Bank, established in 1865. When the American Civil War stopped the supply of cotton to Lancashire from the Confederate States, promoters opened banks to finance trading in Indian cotton.
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With large exposure to speculative ventures, most of the banks opened in India during that period failed. The depositors lost money and lost interest in keeping deposits with banks. Subsequently, banking in India remained the exclusive domain of Europeans for the next several decades until the beginning of the 20th century. Foreign banks too start to arrive, particularly in Calcutta, in the 1860s. The comptoired Escompte de Paris opened a branch in Calcutta in 1860 and another in Bombay in 1862, branches in Madras and Pondicherry, then in French colony, followed. Calcutta was the most active trading port in India, mainly due to trade of British Empire and so became a banking center. Around the turn of 20th century, the Indian economy was passing through relative period so stability. Around five decades had elapsed since the Indian mutiny and the social, industrial and other infrastructure had improved. Indians had established small banks, most of which served particular ethnic and religious communities. By the 1900s, the market expanded with the establishment of banks such as Punjab national bank in 1859 in Lahore and bank of India in 1906, in Mumbai both of which were founded under private ownership. Punjab national bank was the first swadeshi bank founded by the leaders like Lala Lajpat Rai, Sardar Dyal Singh matithian. The swadeshi movement particularly inspired local businessmen and political figures to found bank of and for Indian community. A number of banks established then have survived to the present such as bank of India, corporation bank Indian bank, bank of Baroda, Canary bank and central bank of India.

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Current scenario of India banking industry:

The industry is currently in a transition phase. On the one hand, the PSBs, which are the mainstay of the Indian Banking systems, are in progress of shedding their flab in terms of excessive manpower, excessive non-performing asset and excessive governmental equity, while on the other hand the private sector banks are consolidating themselves through mergers and acquisitions. The private players however cannot match the PSBs great reach great size and successes to low cost deposits. Therefore one of the means for them to combat the PSBs has been through the mergers and acquisitions route. Over the last two years, the industry has witnessed several such instances. For instances, HDFC bank mergers with Times bank, ICICI banks acquisition of ITC Classic, Anagram Finance and bank of Madura. Centurion bank, Indusind bank, bank of Punjab, Vysya bank are said to be on the lookout. The UTI bank-Global Trust bank mergers however opened a Pandoras box and brought about the realization that all was not well in the functioning of many of the private sector banks. Private sector banks have pioneered internet banking, phone banking, anywhere banking mobile banking, debit cards, automatic teller machines (ATM) and combined various other services and integrated them into the mainstream banking arena, while the PSBs are still grappling with disgruntled employees in the aftermath of successful VRS schemes. Also, following Indias commitment to the agreement in respect of the services sector, foreign banks, including both new and the existing ones, have been permitted to open up to 12 branches a year with effect from 1998-99 as against the earlier stipulation of 8 branches.

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Future of the banking industry:

The futures of banking industry are into the area of the following: 1) Rural banking 2) Ban assurance 3) Financial cards 4) Mobile banking 5) Role of technology in rural banking 6) Pension funds-pension fund industry to be taken at Marco level 7) Customer relationship through technology and innovations 8) Enterprise CRM in retail banking 9) Fresh openings in retail operations 10) Micro finance 11) Opportunities in non agricultural credit 12) Risk management and Basel 2 13) Customer protection 14) Skilled manpower 15) Non-performing assets 16) Technology

Indian banking sector scenario:

1) Central bank: The reserve bank of India is the central bank that is fully owned by the government. It is governed by a central board (headed by a governor)

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appointed by the central government. It issues guidelines for the functioning of all banks operating within the country.

2) Public sector banks:

The public sector banks of in India are as follows: State bank of India and its associated banks called the State Bank Group. 20 nationalized banks Regional rural banks mainly sponsored by public sector banks

3) Private sector banks: The types of private sector banks in India are as follows: Old generation private banks New generation private banks Foreign banks operating in India Scheduled co-operative banks Non-scheduled banks

4) Co-operative sector:
The types of co-operative banks in India are as follows: The co-operative sector is very much useful for rural people. The cooperative banking sector is divided into the following categories. State co-operative banks
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Central co-operative banks Primary agriculture credit societies

5) Development banks/financial institutions: The types of development credit banks in India are as follows: IFCI IDBI ICICI IIBI SCICI ltd NABARD Export-import bank of India National housing bank Small industries development bank of India North eastern development finance corporation

6) Retail banking sector: Retail banking refers to the banking in which banking institution executes transaction directly with consumers, rather than corporations or other banks. Services offered include: savings and checking accounts, mortgages, personal loans, debit cards and so forth.

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7) Opportunities and challenges of Indian banking industry:

The banking industry in India is undergoing a major transformation due to changes in economic conditions and continuous deregulation. Deregulation: This continuous deregulation has made the Banking market extremely competitive with greater autonomy, operational flexibility, and decontrolled interest rate and liberalized norms for foreign exchange. The deregulation of the industry coupled with decontrol in interest rates has led to entry of a number of players in the banking industry. At the same time reduced corporate credit off take thanks to sluggish economy has resulted in large number of competitors battling for the same pie. New rules: As a result, the market place has been redefined with new rules of the game. Banks are transforming to universal banking, adding new channels with lucrative pricing and freebees to offer. Natural fall out of this has led to a series of innovation product offerings catering to various customers segments, specifically retail credit. Efficiency: This in turn has made it necessary to look for efficiencies in the business. Banks need to access low cost funds and simultaneously improve the efficiency. The banks facing pricing pressure, squeeze on spread and have to give thrust on retail assets. Diffused customer loyalty: This will definitely impact customer preferences, as they are bound to react to the value added offerings. Customers have become demanding and the loyalties are diffused. There are multiple choices; the wallet share is reduced per bank with demand on flexibility and customized service and hassle free, flawless service delivery.

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Key business services:

Banking in India is so convenient and hassle free that one (individual, groups or whatever the case may be) can easily process transactions as when required. The most common services offered by banks in India are as follow: Bank accounts: It is the most common services of the banking sector. An individual can open a bank account, which can be savings, current or term deposits. Loans: You can approach all banks for different kinds of loans. It can be a home loan, car loan, personal loans, loan against shares and educational loans. Money transfer: Banks can transfer money from one corner of the globe to the other by issuing demand drafts, money orders or cheques. Credit and debit cards: Most banks offer credit cards to their customers, which can be used to purchase products and services, or borrow money. Lockers: Most banks have safe deposits lockers, which can be used by the customers for storing valuables, like important documents or jewelers.

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Meaning of Research:
A systematic search for an answer to a question or a solution to a problem is called research. Research simply means a search for facts-answers to questions and solutions to problems. It is a purposive investigation. It is an organized inquiry. It seeks to find explained phenomenon, to clarify the doubtful propositions and to correct the misconceived facts.

Definition of Research:
Ker linger defines research as a systematic, controlled, empirical and critical investigation of hypothetical propositions about the presumed relations among natural phenomena.

Research design:
Research design is the arrangements of conditions of the study and collection of data in a manner that aims to continue relevance to continue relevance to the purpose of the study. A research design is a logical and systematic plan prepared for directing a research study. It specified the objectives of the study, the methodology and technique to be adopted for achieving the objectives. It constitutes the blue print for the collection, measurement and analysis of data. It provides a systematic plan of procedure for the researcher to follow.

Definition of research design:

According to C. Selltic A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with the economy in procedure

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Types of research design:

According to the nature and purpose of the research study we can classify the research designs into three broad categories: 1) Exploratory research design 2) Descriptive and diagnostic research design 3) Hypothesis testing research design

Title of the study:

A REPORT ON FINANCIAL STATEMENT THROUGH RATIO ANALYSIS AT ING-VYSYA BANK

Objectives of the study:

To know myself about the subject and to get better and good knowledge regarding the financial matters as well as analyze that to in an INGVYSYA BANK. To know from where the funds will be obtained in what amount fund would be raised, how mush to invest in a particular work, how to plan the proper utilizations of the available fund and also to avoid the misuse of available fund. To analyze the management efficiency of the company. To study the financial matters in detail. To evaluate the liquidity and profitability of the company.
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To gain a practical knowledge about the various financial activities of the company

Rationale behind the study:

The main reason for selecting the financial management and ratio analysis as field of my project work is to know the financial activities as well as economic and marketing role-played by the company and to get the knowledge about the difference in theory and practice. It also helps me to know more about the financial management system in practice as I have selected finance as my optional subject in my final year BBM, it will help me future and for my higher studies.

Scope of the study:

This report is mainly done for academic purpose and for the employees of the company. This report would give details of financial statements through ratio analysis of ING-VYSYA BANK. The study was conducted as per the requirements of Bangalore University BBM program.

Statement of the study:

Financial soundness in terms of liquidity, leverage, profitability and activity is the main objectives in from of growing organization. To analyze in this view and drawn meaningful conclusion to come to a right decision, analytical techniques are required, among such techniques ratio analysis is one valuable technique in the hands of a financial analyst. Therefore the study conducted to analyze the financial management and financial ratios in the evaluation of ING-VYSYA BANK limited financial soundness.
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Methodology used:
By taking the financial statements of the company the various financial details, analysis and interpretation have been done. Graphical representations are been given with the analysis and the interpretation.

Limitations of the study:

1) The data has been collected through secondary sources; there are possibilities of occurrence of errors. 2) Only ratio analysis has been performed to evaluate the financial performance of ING-VYSYA BANK. 3) A detailed analysis in respect of external, internal, horizontal, vertical analysis and the others could not be performed due to time constraint. 4) Inviolability of secondary data 5) The data was collected across predefined parameters. 6) The research work is limited only to the information provided in INGVYSYA BANK only. 7) The research work could have been done in more than one bank for a comparison study, but to time constraint it was not possible. 8) The study has been made considering board criterias and there may be insufficient to draw any conclusions. 9) Certain parameters in the study change over time. The study is limited in scope and cannot be applied to the industry as the whole. 10) The study is only based on financial management. 11) Much of the information is related to financial activities have not been gathered due to company secrecy maintenance.

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Need for the study:

1) To gain an exposure towards the actual management f the organization. 2) To gain the theoretical and practical knowledge of the subject. 3) To find out the variations from the actual and theoretical organization. 4) To gain experience and knowledge from the study.

Sources of data:
Data is collected from primary and secondary sources. 1) Primary data: Primary data is collected by conducting informal interviews with the key personnels that is with the manager and also with the concerned staff of the bank. 2) Secondary data: Secondary data was collected from the sources such as annual reports of the last 5 years, brochures, from standard banking books and website (www.ingvysyzabank.com)

Importance of the report:

The increasing profit of the company year after, in terms of amount as well as in terms percentages helps to know the entrepreneurs to feel that the company is in good position but they must give importance to only to the past, but also for the present and future situation. This gives an idea to the promoters of the company

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that they must maintain their increasing trends of earnings profit for the organization that is future also. Research methodology Company documents Published sources Personal observation The above are the materials that have been adopted to carry out thesis. With the above I have added relevant graphs and charts related to my research, which are drawn from the companys financial aspects to make this more interesting to reader.

Period of study:
The study was conducted for a period of one month, from 10december 2009 till 10january 2010.

Chart representation:
The diagrammatic representation used by the researcher in this research is BAR DIAGRAM. Bar diagram consists of rectangular bars on a common base. Bars with equal width and are equally spaced. Comparisons are based on the length of the bars.

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Sampling procedure:
The sampling procedure followed in the study is the random study is the random sampling.

Plan of analysis:
The analysis is done using various statistical techniques like graphs and charts for better comparison and interpretation.

Overview of the chapters: Chapter-1: INTRODUCTION

The report starts with an introduction of finance, organization of finance department, finance manager, meaning and definition of financial management, Financial statements, techniques of financial analysis, meaning and definition of ratio analysis, interpretation of ratios, uses of ratios, significance of ratios, objectives of ratio, limitations of ratio, classifications of ratios, types of ratios, ratios used in the study, , Indian banking structure

Chapter-2: RESEARCH DESIGN

The second chapter provides information regarding meaning and definition of research and research design, statement of problem, methodology, scope of study, limitations of study, types of research, rational behind the study title of study, source of data, need of study, period of study, chart representation.

Chapter-3: COMPANY PROFILE

The third chapter contains the profile of bank, history of bank, milestones of bank. Overview of company, origin, profile, vision, mission, corporate statement,
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identity, strengths, functions, achievements, award, strategy, latest news, product profile, brand positioning, management, key competitors, knowledge management tool, quick review.

Chapter-4: DATA ANALYSIS AND INTREPATION

The forth chapter contains the ratios, tables, analysis and interpretations.

Chapter-5: FINIDINGS, SUGGESTIONS AND CONCLUSION

The fifth chapter put forth the findings of the study, conclusion that have been arrived and suggestions given and SWOT analysis.

BIBLIOGRAPHY ANNEXURE

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ING-VYSYA BANK: History:

ING Vysya Bank Ltd is the prominent Bank in India, formed with the Vysya Bank Ltd, a premier bank in the Indian Private Sector and ING Group, a global financial powerhouse of Dutch origin, in the year 2002. With their core Banking Solution, IT oriented products and focused Retail Banking and Wholesale Banking Services, the Bank aims for sustainable growth to benefit all the stakeholders, clients and employees and society at large. Bank was originally incorporated on March 29, 1930 as The Vysya Bank Ltd. In the year 1948, the Bank acquired the status of Scheduled Bank. Since then the Bank has grown in size and stature and has reached the coveted position of number one private sector bank in India. Since then the Bank has grown in size and stature and has carved a distinct identity of being India's Premier Private Sector Bank. Subsequent to acquisition of stake in the Bank by ING Group NV in August 2002, the name of the Bank was changed from Vysya Bank Ltd to ING Vysya Bank Ltd. In the year 1987, the Bank incorporated the Vysya Bank Leasing Ltd for leasing and merchant banking activities along with Karur Vysya Bank Ltd. In the year 1990, they incorporated Vysya Bank Housing Finance Ltd for housing finance activities. In the year 1996, the Bank signed a Strategic Alliance with BBL. In March 2000, The Vysya Leasing Ltd became the wholly owned subsidiary of the Bank and in November 2000, they opened data center at Information Technology Park Ltd, Bangalore. In the year 2001, the Bank along with ING Group promoted a joint venture company called ING Vysya Life Insurance Company Pvt Ltd for
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undertaking life insurance business throughout India. In the year 2002, the Bank launched a range of products & services like the Vys Vyapar Plus, the range of loan schemes for traders, ATM services, Smart services, personal assistant service, Save & Secure, an account that provides accident hospitalization and insurance cover, Sambandh, the International Debit Card and the mi-bank net banking service. ING takes over the Management of the Bank from October 7, 2002 and the name of the Bank was changed from The Vysya Bank Ltd to ING Vysya Bank Ltd with effect from December 7, 2002. Bank Brussels Lambarta made a strategic investment in our bank between 1996 and 2002. ING Group N.V., a global financial conglomerate of Dutch origin, later acquired bank Brussels Lambert. The name of our bank was consequently changed to ING VYSYA BANK Ltd on November 1 2002 and our license to carry on RBI to reflect our new name amended the banking business. ING Group N.V. as its presence in India trough ING VYSYA LIFE INSURANCE COMPANY (India) LIMITED private and ING

INVESTMENT

MANAGEMENT

limited.

During the year 2003-04, the wholly owned subsidiary of the Bank, Vysya Bank Financial Services Ltd commenced the distribution of various financial products such as insurance products, mutual funds etc. The name of the company was changed to ING Vysya Financial Services Ltd. Also, they introduced customer friendly products like Orange Savings, Orange Current and Protected Home Loans. In July 2003, the Bank divested their entire stake in Vysya Bank Housing Finance Ltd to Dewan Housing Finance Ltd for Rs 23.20 crore. In September 2003, the bank issued Tier II Bonds (second series) aggregating to Rs 200 crore at a
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competitive coupon rate of 6.25%. During the year 2005-06, the company divested their entire stake of 14.87% in ING Vysya Life Insurance Company Pvt Ltd to Gujarat Abuja Cements Ltd. In April 2007, the Bank sold their entire shareholding of 9930000 shares in Investment Management (India) Pvt Ltd, during the year 2007-08, the Retail Branch Banking business launched a slew of products to provide clients with enhanced solutions to meet their financial needs besides the traditional deposit products. ING Bank N V is investing in the Tier I issue of ING Vysya Bank Ltd, by way of Innovative Perpetual Bonds (IPDs) in foreign currency for an amount of Rs 94.50 crore with a call option at the end of 10 years. The table below sets for the certain key information about the bank: As of June 30, 2009 Total advances Total deposits Total low-cost deposits Retail loans as of march 31, 2009 161487 226083 65016 94564 167509 248899 67129 98252

ING are one of the oldest private sector banks in India with a 79year long history and are engaged in offering a wide variety of wholesale, retail and private banking products and service to our customer.

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As of March 31, 2008 ING-VYSYA were the seventh largest private sector bank in India in terms of deposits and the eighth largest private sector bank in India in terms of advances.

Company overview:
It's been a long journey since then and the Bank has grown in size and stature to encompass every area of present-day banking activity and has carved a distinct identity of being India's Premier Private Sector Bank. The company was originally incorporated as The Vysya Bank Limited on march 29,1930 with limited liability under the Mysore companies regulations, 1917. They received certificate of commencement of business on July 24, 1930. RBI granted them license to carry on banking business in India under the banking regulations act 1949 on June 6, 1958. ING-VYSYA is a scheduled commercial bank within the meaning of the RBI act 1934. In 1980, the Bank completed fifty years of service to the nation and post 1985; the Bank made rapid strides to reach the coveted position of being the number one private sector bank. In 1990, the bank completed its Diamond Jubilee year. At the Diamond Jubilee Celebrations, the then Finance Minister Prof. Madhu Dandavate, had termed the performance of the bank Stupendous. The 75th anniversary, the Platinum Jubilee of the bank was celebrated during 2005. ING Vysya Bank Ltd., is an entity formed with the coming together of erstwhile, Vysya Bank Ltd, a premier bank in the Indian Private Sector and a global financial powerhouse.

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ING of Dutch origin, during Oct 2002. The origin of the erstwhile Vysya Bank was pretty humble. It was in the year 1930 that a team of visionaries came together to found a bank that would extend a helping hand to those who weren't privileged enough to enjoy banking services. It's been a long journey since then and the Bank has grown in size and stature to encompass every area of present-day banking activity and has carved a distinct identity of being India's Premier Private Sector Bank. In 1980, the Bank completed fifty years of service to the nation and post 1985; the Bank made rapid strides to reach the coveted position of being the number one private sector bank. In 1990, the bank completed its Diamond Jubilee year. At the Diamond Jubilee Celebrations, the then Finance Minister Prof. Madhu Dandavate, had termed the performance of the bank Stupendous. The 75th anniversary, the Platinum Jubilee of the bank was celebrated during 2005.

The origin of ING Group:

On the other hand, ING group originated in 1990 from the merger between National Nederland NV the largest Dutch Insurance Company and NMB Post Bank Group NV. Combining roots and ambitions, the newly formed company called International Nederland Group. Market circles soon abbreviated the name to I-N-G. The company followed suit by changing the statutory name to ING Group N.V..

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ING VYSYA BANK:

Type

Private BSE: 531807

Founded

1930, India.

Headquarters

India

VaughnRichtor,MD&CEO Key people K.R.Ramamurthy,Non-ExecutivePart-time Chairman

Industry

Financial Commercial banks

Website

www.ingvysyabank.com

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Milestones of ING-VYSYA BANK:

The long journey of seventy-five years has had several milestones. They are:
1930: Set up in Bangalore 1948: Scheduled bank 1985: Largest private sector bank 1987: The VYSYA bank leasing Ltd. Commenced 1988: Pioneered the concept of co-branding of credit cards 1990: Promoted VYSYA bank housing finance Ltd 1992: Deposits cross Rs.1000 crores 1993: Number of branches crossed 300 1996: Signs strategic alliance with BBL, Belgium, Two national awards by Gem and Jeweler export promotion council for excellent performance in export promotion. 1998: Cash management services and commissioning of VSAT. 1999: Golden Peacock award- for the best HR practices by Institute of directors. Rated as domestic bank in India by global finance(International finance journal-June 1999) 2000: State-of the-art, date centre at ITPL, Bangalore. RBI clears setting up of ING-VYSYA LIFE INSURANCE. 2001: ING-VYSYA commenced LIFE INSURANCE BUSINESS. BBM @ B.M.S.C.W, 2010 67

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2002: The bank launched a range of products and services like the Vyaya Vyapar plus, the range of loan schemes for traders, ATM service, smart services, personal assistance service, save and secure, an account that provides accident hospitalization and insurance cover, sambandh, the international debit card and the mi-bank net banking service. 2002: ING takes over the Management of the bank from October 7th 2002. 2002: RBI clears the name of the bank as ING VYSYA BANK ltd; vide their letter of 17/12/02. 2003: Introduced customer friendly products like orange savings, orange current and protected home loans. 2004: Introduced protected home loans-a housing loan product. 2005: Introduced solo- my own account for youth and customer service line and also introduced Phone banking. 2006: Bank has networked all the branches to facilitate AAA: transactions that is Anywhere banking, anytime banking and anyhow banking.

ING in India:
In India, ING is present in all three fields of banking, insurance and asset management in the form of ING, ING Vysya Life Insurance and ING Investment Management respectively. The presence in all three fields signifies the importance that the group attaches to the Indian markets and the group's operations here, as well as its bullish future outlook on the country. ING and ING Vysya Life Insurance are headquartered at Bangalore, while the corporate office of ING Investment Management is situated at Mumbai. The synergies arising out of the three distinct but complimentary businesses are bound to be an asset to the group
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in the changing market dynamics of the future. The first such signs are already visible on the horizon with combined products being successfully launched by the different entities of the group in conjunction with each other.

Profile:
ING has gained recognition for its integrated approach of banking, insurance and asset management. Furthermore, the company differentiates itself from other financial service providers by successfully establishing life insurance companies in countries with emerging economies, such as Korea, Taiwan, Hungary, Poland, Mexico and Chile. Another specialization is ING Direct, an Internet and direct marketing concept with which ING is rapidly winning retail market share in mature markets. Finally, ING distinguishes itself internationally as a provider of employee benefits, i.e. arrangements of nonwage benefits, such as pension plans for companies and their employees.

Mission Statement:
ING`s mission is to be a leading, global, client-focused, innovative and low-cost provider of financial services through the distribution channels of the clients preference in markets where ING can create value.ING Financial Markets, based out of Mumbai is a leading player in the Indian Financial Markets providing one of the widest ranges of products for large corporate, small and medium enterprises as well as individual needs. Supported by state-of-the-art systems and the capabilities of the ING Group, we offer competitive pricing and efficient execution across markets and a comprehensive suite of products.

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Financial Markets unit is an active market maker on most rupee interest rate and currency products. Within the bank, we play a key role in the Asset Liability Management and ALM strategy. To our corporate and institutional clients, we offer a comprehensive range of products for transactions and risk management needs through the sales desks at Mumbai, Delhi, and Bangalore & Chennai.The Financial Markets business is driven by a highly qualified and knowledge driven team that brings together a deep understanding of local and global markets as well as complex financial products.

INGs Corporate Statement:

At ING life, we strongly believe that the life is different at every stage; life insurance must offer flexibility and choice to go with that stage. We are fully prepared and committed to guide you on insurance products and services through our well-trained advisors, backed by competent and customer services, in best possible way. It is our aim to become one of the top private life insurance companies in India and to become a cornerstone of INGs integrated financial service business in India.
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The new identity:

The immediate benefit to the bank, ING Vysya Bank, has been the pride of having become a Member of the global financial giant ING. As at the end of the year December 2008, ING's total assets exceeded 1332 billion Euros, employed over 125000 people, and served over 85 million customers, across 50 countries. This global identity coupled with the backup of a financial powerhouse and the status of being the first Indian International Bank, would also help to enhance productivity, profitability, to result in improved performance of the bank, for the benefit of the entire stakeholder.

Functions of ING Vysya:

Business Compliance Regulatory Guidelines Dissemination & Advisory Financial Economic Crime (FEC) & Sanctions Desk Policy Framework & MIS Training & Communication

Strengths:
Banking experience of 79years Association with ING Group N.V. Professional management Strong market presence and recognition among small and medium enterprise customers Centralized and modern technology platform
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Multiple delivery channels and distribution infrastructure

Distribution Channels:
ING Vysya Life has a diversified distribution platform. While Tied Agency remains the strongest channel, the alternate Channels business within ING Vysya Life is one of the fastest growing distribution channels. ING Vysya Life has strengthened its position as the unparallel leader in the life insurance industry in cooperative banks tie-ups. The company currently has tie-ups with 130 Cooperative banks across the country. The Alternate Channels division has Banc assurance, ING, Corporate Agents and SMINCE.

The Brand Positioning:

In 2007, ING Vysya Life developed its unique brand positioning Mera farz. This positioning means, ING Vysya Life helps its customers fulfill their responsibilities towards themselves and their families. This powerful positioning has helped ING Vysya Life create a distinct identity for itself. The latest brand campaign with a very catchy jingle dwells on how a little planning and a helping hand from ING Vysya life can help lighten the burden of responsibilities that often come with happy moments and let you enjoy your life without any worries.

Achievements:
A few achievements are highlighted below: First investment manager to launch a packaged concept in Asset Management Industry.

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Awarded Abby Gold 2006 for its advertising Campaign for ING LION Fund. Two CRISIL AAAf * products in Debt Fund space. (ING Liquid Fund & ING Floating Rate Fund). First Asset Manager to launch a debt fund based on Credit risk with a portfolio based on credit monitor. (ING Select Debt Fund). First Private Sector Mutual Fund to launch a concept dedicated to women. (Mahilanivesh). Asia Asset Monitor awarded Most Innovative Product ING Dynamic Asset Allocation Fund. ING Mutual Fund recently launched Indias first DAILY TRANSFER PLAN called Zoom Investment Pac (ZIP). ING Mutual fund has also pioneered a new reality show on television called Indian Investor of the year.

Strategy:
INGs objective is to enhance its position as a premier provider of banking and other financial services in India. Some of the business strategies that have envisaged are as follows: Enhance the quality and spread of banking franchise Continue to leverage on the synergies with ING Grope N.V. Attract and retain talent
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Continue the focus on operational efficiency and risk management

Social Objectives:
The key objective of the ING Chances for Children program is to improve the well-being of children aged 4-12 worldwide by giving them access to free, compulsory basic schooling that aims to develop each child's ability to the fullest. ING Chances for Children will be doing this by giving children access to education, by providing the necessary skills and through investment in educational organizations. The main targets of the ING Chances for Children program are:

To provide primary education for 50,000 children over a period of three

years.

To improve the quality of education in the communities in which ING

business are active.

To involve as many of the ING groups 115,000 employees as possible ,

either as ambassadors, volunteers or donors.

ING News:
News release on the working result of the bank for the quarter year ended 30th September 2009. ING VYSYA BANK shareholders approve capital rising. ING VYSYS BANK raises 415 crores through successful QIP and a preferential placement.

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Shailendra Bhandari appointed as MD and CEO of ING VYSYA BANK Ltd. ING VYSYA BANK Q1 net profit up 48%. ING VYSYA BANK CEO steps down on completion of tenure. ING VYSYA BANK launches kids portal www.kidzzbank.com. Banking and Financial News - November 2009 (updated as of 30-11-2009): Banks should reach unbanked areas:Patel RBI to fine tine norms on credit default swaps. RBI may hire external hands. Banks asked to disclose to customers fees, commissions received from mutual funds. Move for single regulator gathers steam. Stimulus rollback not at one go. Crisis management-effect on the RBIs balance sheet. Behave wants IPO processing time cut to 7 days. Center asks PSBs to hunt for mergers and acquisitions. Banks sitting on pile of sanctioned loans. Banks find DRT a better recovery mechanism. Moodys retains its negative view on Indians banking sector. Banks to get six more months to cover NPAs. Government may do away with lock in period for FDI in real estate.

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Products and Services

Foreign Exchange Transaction Hedging Solutions Money Market Products Management of risk continues to be one of the most important aspects of running successful businesses. Financial Markets at ING help manage different kinds of risks by matching clients risk management needs with appropriate solutions; offering them world-class solutions and services for managing different risks in their businesses, dealings in foreign currency for import/export or short term assets or liabilities.

Mutual Funds:
As a distributor of Mutual Funds, they are tied up with almost all the Asset Management Companies thereby assisting their clients to invest in mutual fund schemes, which meet with their investment requirements.

Life Insurance:
ING is actively engaged in selling ING Life Insurance products.ING Life Insurance provides a range of products including endowment, pension & unit linked plans.More details on ING Life Insurance products are available at the link www.ingvysyalife.com

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Product profile of ING-VYSYA bank:

The product profile of ING-VYSYA bank are given in brief, the product offered by ING-VYSYA are the Platinum preferred banking: savings account (orange savings account, general savings account, solo savings account, saral savings account, orange salary account, advantage salary account, freedom account, ING formula savings account). The current accounts( orange current account advantage current account, general current account and comfort current account), and the term deposits (fixed deposits, cumulative deposits, akshaya deposits, and advantage deposits) and demat account.

Services:
The services offered by ING-VYSYA bank are advisory services, nondiscretionary, portfolio management, operational and regulatory services, transactions services, trust and estate planning, private investment banking among the others.

NRI services:
The NRI services rendered by ING-VYSYA BANK are accounts and deposits (rupee savings account, NRE savings account, NRO savings account, rupee current account, NRE current account, NRO current account, rupee fixed deposits, NRE fixed deposits, NRO fixed deposits, NRO Akshya deposits, NRE Akshya deposits, NRE cumulative deposits, NRO cumulative deposits, foreign currency deposits, FCNR Akshya deposits, FCNR deposits, NRI home loans remittances (Mi-remi, Telegraphic/wire transfers, funds transfers cheque, DDs/TCs/Western
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union money transfer, corporate services, (small and medium enterprise, agri and rural banking, Wholesale banking and financial markets).

Loans:
The loans and advances rendered and offered by ING-VYSYA BANK are personal loans, home loans, home equity loans and NRI loans, agricultural loans (terms loans and short term loans).

Cards:
The different types of credit cards and debit cards offered by ING-VYSYA BANK are credit cards and debit cards (ING regular debit card, ING formula debit Card and ING patina debit card).

Insurance:
ING Vysya Life Insurance Company Limited, a part of the ING Group, the worlds largest financial services provider, entered the private life insurance industry in India in September 2001. Headquartered at Bangalore, ING Vysya Life is currently present in 246 cities and has a network of over 300 branches, staffed by 7,000 employees and over 51,000 advisors, serving over 5.5 lakhs customers.

Investments:
ING-VYSYA BANK offers Mutual funds and Government of India and tax savings bonds.

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Management:
Board of directors: K R Ramamurthy (Non-Executive Part-time Chairman) Shailendra Bhandari (Managing Director & Chief Executive Officer) Arun Thiagarajan (Director) Wilfred Nagel (Director) Aitya Krishna (Director) Philippe Damas (Director) Richard Cox (Director) Ryan Andre Padgeet (Director) Santosh Raamesh Desai (Director) M.Damodaran (Director) Santosh Ramesh Desai(Director) Vaughn Nigel Richto (director) Senior Management Team: Kshitij Jain (Managing Director and Chief Executive officer) B. Ashwin (Chief Operating officer) Rahul Agarwal (Chief Distribution Officer) Marco Fredrik (Financial Controller)
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Amit Gupta (Director - Marketing & Communication) Priya Gopalakrishnan (Director - Human Resources) T K Uthappa (Director, Sales - Tied Agency) Rene van der Poel (Director - Alternate Channels) Ravishankar Subramanian (Director-Information Technology & Corporate Services) Hemamalini Ramakrishna (Appointed Actuary and CIRO -Chief Insurance Risk Officer)

Corporate Social Responsibility:

The bank as a part of its Corporate Social Responsibility has undertaken many purposeful activities. ING Vysya Foundation was set up almost three years ago actively supported by the three business units of ING Vysya (ING Vysya Bank, ING Vysya Life Insurance and ING Vysya Mutual Fund) to promote its Corporate Social Responsibility. The mandate for the foundation is to promote primary education for under privileged children. Accordingly, ING Vysya Foundations commitment to empower children through primary education has been the focus in the last three years. In a country with an estimated 50 million children deprived of basic primary education and health care, enormous support, dedication and firm belief is necessary to make a difference and to change the scenario. The foundation's efforts have been very successful in reaching out to underprivileged children and providing them with a platform to learn, grow and achieve through partnerships with 4 nonprofit organizations located in India.
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Today, the Foundation partners with eight organizations in India. It contributes hugely to the Global initiative ING Chances for Children in partnership with UNICEF. The Foundation has been able to support 1 lakhs children from all over India to be in school with the active support of the employees across the ING businesses in India.

Responsibility:
ING strives to be a good citizen. Ethical, social and environmental considerations play an integral part in their business decisions. ING is committed to playing an active role as a community sponsor. It does this through a wide range of local sponsorships and through its global Chances for Children initiative, which provides access to primary education to underprivileged children in developing countries who would otherwise not have the chance to attend school.

Key competitors:
The key competitors of ING-VYSYA BANK are ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, Federal Bank, Yes Bank, JK Bank, IndusInd Bank and Karur Vysya Bank.

Product Portfolio:
ING Vysya Life follows a customer centric approach while designing its products. The Companys product portfolio offers products that cater to every financial requirement, at all life stages. In fact, the company has developed the LifeMakerTM a simple tool, which can be used to choose a plan most suitable to a specific customer, based on his needs,

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requirements and current life stage. This tool helps you build a complete financial plan for life at every life stage, whether the requirement is Protection, Savings, Investment or Retirement. Suitable products from ING Vysya Life Insurances product portfolio for each such requirement, makes selection of your plan an easy exercise. The Company aims to make customers look at life insurance afresh, not just as a tax saving device but as a means to live life to the fullest. It believes in enhancing the very quality of life, in addition to safeguarding an individual's security

ING Chances for Children - India initiative:

In India, along with the ING Vysya Foundation, the ING and UNICEF partnership is focused to provide quality education for working children in Tamil Nadu. 15,000 children will benefit from quality education in 200 learning centers for former child workers under the National Child Labor Elimination Project (NCLP). The project focuses on strategies to provide quality education for children who is either already working in low-paid, low-skilled industries or who are out-of-school and therefore extremely vulnerable to becoming child laborers. In Tamil Nadu the project emphasizes on child-friendly schools, quality education, community involvement and responsibility in ensuring children can learn and build a solid foundation for a hopeful future and make a strong basis for ensuring that children remain in school and complete a course in primary education. Activities will especially focus on preventing child labor, protecting childrens rights and promoting quality education.600 teachers will be reinvigorated through capacity building and professional training pedagogy and motivation. Through workshops with some 180 staff from government departments, UNICEF will cultivate and reinforce supportive alliances in order to ensure quality education.
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Knowledge Management Tools:

Bank has to follow the norms prescribed by various regulatory authorities on a wide range of issues for the protection of investors, consumers and for the development of the country as a whole. These norms are amended / modified by the regulators from time to time. Functional Departments, Branches, Regional Offices and employees in the bank find it difficult to search these guidelines. To provide easy search and access, Compliance Department has availed the KMT. Knowledge Management Tool (KMT) is a tool availed from M/s. Alpha plus Technologies Ltd. by Compliance Department for the purpose of instant references by all the employees of our bank branches/departments with easy search options, on the rules, regulations, guidelines, policies, laws, statutes, Circulars, Master circulars, Compliance etc. of various regulators. This is a tool of External Guidelines. i.e., guidelines by regulatory and other authorities. However for internal operations, the manuals and circulars may be referred and where there is some doubt, Compliance Department may be approached for clarification.

Quick review:
VYSYA BANK-Founded in 1930 Number.1 Private Sector bank 1985 Scheduled bank 1948 ING- International Netherladen Group Founded 1990 Merge between National Dutch Insurance Company and NNB post bank group
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43.99% share in the bank 7/15 directors in the board ING-VYSYA BANK merged in 2002 300 branches

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Cost of deposits ratio:

Table 1:

INTEREST ON YEAR 2005 2006 2007 2008 2009 DEPOSITS 516 617 713 1046 1401

AVERAGE DEPOSITS 10526 12667 13492 16668 20516 PERCENTAGE 4.90% 4.87% 5.28% 6.28% 6.83%

Analysis:
The above table states that the cost of deposits in the year 2005 was 4.90% it decreased to 4.87% in the year 2006 and it saw a gradual increase during 2007, 2008 and 2009 as 5.28%, 6.28% and 6.83% respectively.

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Graph 1:

Interpretation:
Graph showing the cost of deposits of ING-VYSYA BANK of past five years. The cost of deposits of ING VYSYA BANK increased year to year because the rate of interest at bank was also increasing year to year.

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Cost of funds ratio:

Table 2:

AVERAGE YEAR 2005 2006 2007 2008 2009 INTEREST EXPENDED 647 825 960 1297 1748 LIABILITIES 7503 9393 10278 12361 15220 PERCENTAGE 5.42% 5.29% 5.78% 6.56% 6.92%

Analysis:
The above table states that in the year 2005 the cost of funds was 5.42%, it has decreased to 5.29% in the year 2006, and there was again increase in the year 2007 to 5.78%, in 2008 it has increased to 6.56% and also in the year to 6.92%.

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Graph 2:

Interpretation:
Graph showing the cost of funds of ING-VYSYA BANK of past five year. From the above graph we can see the cost of funds ratio has been gradually increasing year to year as the company showed more interest on the investments of the company and funded on them more.

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Yield on advances ratio:

Table 3:

YEAR 2005 2006 2007 2008 2009

INTEREST ON ADVANCES 647 825 960 1297 1748

AVG ADVANCES 7503 9393 10278 12361 15220

PERCENTAGE 8.62% 8.78% 9.34% 10.49% 11.48%

Analysis:
The above table gives you the percentage of yield on advances of ING-VYSYA BANK. In the year 2005 the yield on advances was 8.62%, increase to 98.78% in 2006, in the year 2007 the yield on advances was 9.34% and increased to 10.49% and also again increase in 2009 by 11.48%.

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Ratio Analysis at Graph 3:

Interpretation:
Graph showing the yield on advances of ING-VYSYA BANK of past five years. The yield on advances of ING VYSYA BANK has increased year to year because the company has concentrated on their deposits.

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Ratio Analysis at Net interest margin ratio:

Table 4:

YEAR 2005 2006 2007 2008 2009

NET INTEREST 357 481 446 498 650

AVG EARNING ASSETS 12217 14865 5952 18008 22892

PERCENTAGE 2.92% 3.24% 2.79% 2.77% 2.84%

Analysis:
From the above table we get the information about Net interest margin (on average earning assets) of ING-VYSYA BANK. In the year 2005 the net interest margin percentage was 2.92% and increased to 3.24% in the year 2006, suddenly the net interest margin was decreased to 2.79% in 2007 and again decrease to2.77% in 2008 and in the next financial year 2009 it increase to 2.84%.

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Ratio Analysis at Graph 4:

Interpretation:
Graph showing the net interest margin (on average assets) of ING-VYSYA BANK of past five years. There is lot of fluctuations on net interest margin due to fewer sales and direct expenses are increased. To increase the net interest margin the company has to increase the sales and decrease the direct expenses.

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Ratio Analysis at Credit deposit ratio:

Table 5:

YEAR 2005 2006 2007 2008 2009

ADVANCES 9081 10232 11976 14650 16751

DEPOSITS 12569 13335 15419 20458 24890

PERCENTAGE 72.24% 76.73% 77.67% 71.61% 67.30%

Analysis:
From the above table we get the information about credit deposit ratio of INGVYSYA BANK of past five years. In the year 2005 credit deposit ratio percentage was 72.24% and increased to 76.73% in the year 2006, and was again increased by 77.67%, gradually the credit deposit ratio was decreased to 71.61% in 2008 and again decrease to 67.30% in 2009.

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Ratio Analysis at Graph 5:

Interpretation:
Graph showing the credit deposit ratio of ING-VYSYA BANK of past five years. The graph states that there is lot of fluctuations on credit deposit ratio due to the deposits that the company have to be received by public have not received properly and if the ratio must be raised then the company should look after their deposits on correct time.

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Ratio Analysis at Percentage low cost deposit to total deposits ratio:

Table 6:

YEAR 2005 2006 2007 2008 2009

% LOW COST DEPOSITS 3046 3602 4458 6452 6713

TOTAL DEPOSITS 12569 13335 15419 20458 24890

PERCENTAGE 24.23% 27.01% 28.91% 31.54% 36.97%

Analysis:
From the above table we get the information about percentage low cost deposit to total deposits of ING-VYSYA BANK. In the year 2005 percentage low cost deposit to total deposit was 24.23% and increased to 27.01% in the year 2006, and was again increased by 28.91%, in 2007 and in 2008 by 31.54% and in 2009 the %low cost deposits to total deposits gradually decreased to 26.97%.

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Ratio Analysis at Graph 6:

Interpretation:
Graph showing the percentage low cost deposit to total deposit of ING VYSYA BANK of past five years. The graph states that the percentage low cost deposits have been gradually increased year to year as the companys rate of interest is low on the deposits and the company have received more deposits.

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Ratio Analysis at Cost income ratio:

Table 7:

YEAR 2005 2006 2007 2008 2009

OPERATING EXPENSES 380 519 505 609 772

COST INCOME 479 621 731 917 1198

PERCENTAGE 79.28% 83.62% 69.06% 66.47% 64.52%

Analysis:
From the above table we get to see the information about cost income ratio of ING-VYSYA BANK. In the year 2005 percentage of cost income ratio was 79.28% and increased to 83.62% in the year 2006, and gradually decreased to 69.06% in 2007 and also decreased in 2008 to 66.47% and finally decreased in 2009 by 64.52%.

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Ratio Analysis at Graph 7:

Interpretation:
Graph showing the cost income ratio f ING VYSYA BANK of past five years. The graph states that the cost income ratio is decreasing gradually form year to year as the income of the company is decreasing because of the low sales, if the sales of the company increase then the cost income ratio also increases.

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Ratio Analysis at Return on average assets;

Table 8:

YEAR 2005 2006 2007 2008 2009

NET PROFIT -38 9 89 157 189

AVG ASSETS 13203 15839 17265 20832 26751

PERCENTAGE 2.00% 0.06% 0.51% 1.75% 0.71%

Analysis:
From the above table we get to see the information about return on average assets of ING-VYSYA BANK. In the year 2005 the percentage of return on average assets was 2.00% and gradually decreased to 0.06% in the year 2006 and increased to 0.51% in 2007, 0.75% increased in 2008 and decreased to 0.71% in 2009.

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Ratio Analysis at Graph 8:

Interpretation:
Graph showing the return on average assets ratio of ING VYSYA BANK of past five years. The graph states that the return on average assets ratio is decreasing gradually from year to year because the current assets converted into cash immediately.

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Ratio Analysis at Return on equity ratio:

Table 9:

YEAR 2005 2006 2007 2008 2009

NET PROFIT -38 9 89 157 189

AVG EQUITY 723 1009 1066 1305 1624

PERCENTAGE -5.28% 0.90% 8.34% 12.03% 11.62%

Analysis:
From the above table we get to see the information about return on equity of INGVYSYA BANK of past five years. In the year 2005 the percentage of return on equity ratio was negative value 5.28% and gradually increased to 0.90% in the year 2006 and increased to 8.34% in 2007, 12.03% increased in 2008 and decreased to 11.62% in 2009

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Ratio Analysis at Graph 9:

Interpretation:
Graph showing the return on equity ratio of ING VYSYA BANK of past five years. The graph states that the return on equity ratio comes up from negative value to positive value and there is no standard or ideal return on equity ratio. If the return on equity ratio is high then the company is in good position.

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Ratio Analysis at Net interest income/total income ratio:

Table 10:

YEAR 2005 2006 2007 2008 2009

NET INTEREST INCOME 357 481 446 498 650

TOTAL INCOME 479 621 731 917 1198

PERCENTAGE 74.41% 77.56% 60.93% 54.35% 54.26%

Analysis:
From the above table we get to see the information about net interest /total income of ING-VYSYA BANK of past five years. In the year 2005 the percentage of net interest income/total income was 74.41% and gradually increased to 77.56% in the year 2006 and gradually decreased to 60.93% in 2007, 54.35% decreased in 2008 and decreased to 54.26% in 2009.

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Ratio Analysis at Graph 10:

Interpretation:
Graph showing the net interest income /total income ratio of ING VYSYA BANK of past five years. The graph states that the net interest income of the company is gradually

decreasing due to the company is not potential enough to meet its immediate commitments on time to increase their interest income.

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Ratio Analysis at Other income ratio:

Table 11:

YEAR 2005 2006 2007 2008 2009

0THER INCOME 123 139 286 419 548

TOTAL INCOME 1113 1362 1553 2099 2788

PERCENTAGE 11.02% 10.22% 18.39% 19.65% 19.65%

Analysis:
From the above table we get to see the information about other income/total income of ING-VYSYA BANK of past five years. In the year 2005 the percentage of other income/total income was 11.02% and decreased to 10.22% in the year 2006 and gradually increased to 18.39% in 2007, and again increased to 19.65% in 2008 an remain same in 2009.

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Ratio Analysis at Graph 11:

Interpretation:
Graph showing the other income ratio of ING VYSYA BANK of past five years. The graph states that the other income ratio is gradually increasing year to year because assets or other income investment are mostly financed out of loans. This type of indication means the financial soundness of the company is increasing year to year.

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Ratio Analysis at Staff cost ratio:

Table 12:

YEAR 2005 2006 2007 2008 2009

STAFF COST 176 234 227 302 392

OPERATING EXPENSES 380 516 505 609 772

PERCENTAGE 46.33% 45.14% 45.00% 49.61% 50.77%

Analysis:
From the above table we get to see the information about staff cost/total operating cost of ING-VYSYA BANK of past five years. In the year 2005 the percentage of staff cost/total operating cost was 46.33% and decreased to 45.14% in the year 2006, and again decreased to 45.00% in 2007, and gradually increased to 49.61% in 2008, and 50.77% in 2009.

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Ratio Analysis at Graph 12:

Interpretation:
Graph showing the staff cost ratio of ING VYSYA BANK of past five years. The graph states that the staff cost ratio has lot of fluctuations due to maintaince of the management in the company is not efficient, there must be much rotation of the employees.

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Ratio Analysis at Gross net profit ratio:

Table 13:

YEARS 2005 2006 2007 2008 2009

PERCENTAGE 4.98% 4.09% 2.55% 1.38% 1.86%

Analysis:
From the above table we get to see the information about gross NPA ratio of INGVYSYA BANK of past five years. In the year 2005 the percentage of gross NPA ratio was 4.98% and decreased to 4.09% in the year 2006, and again decreased to 2.55% in 2007, 1.38% in 2008 and gradually increased to 1.86% in 2009.

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Ratio Analysis at Graph 13:

Interpretation:
Graph showing the gross NPA ratio of ING VYSYA BANK of past five years. The graph states that the gross NPA ratio has lot of fluctuations due to the sales of the company must be low and the direct expenses must be increased, to overcome the sales of the company must be increased.

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Ratio Analysis at Net profit ratio:

Table 14:

YEARS 2005 2006 2007 2008 2009

PERCENTAGE 2.14% 1.76% 0.95% 0.70% 1.23%

Analysis:
From the above table we get to see the information about net NPA ratio of INGVYSYA BANK of past five years. In the year 2005 the percentage of net NPA was 2.14% and decreased to 1.76% in the year 2006, and again decreased to 0.95% in 2007 and 0.70% in 2008, increased to1.23% in 2009

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Ratio Analysis at Graph 14:

Interpretation:
Graph showing the net NPA ratio of ING VYSYA BANK of past five years. The graph states that the net NPA ratio has lot of fluctuations due to the company profits have gradually decreased, it the net profit ratio is high it indicates that the profitability of the company is good

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Ratio Analysis at Capital adequacy ratio:

Table 15:

YEARS 2005 2006 2007 2008 2009

PERCENTAGE 9.10% 10.67% 10.56% 10.20% 11.68%

Analysis:
From the above table we get to see the information about capital adequacy ratio of ING-VYSYA BANK of past five years. In the year 2005 the percentage of capital adequacy ratio was 9.10% and increased to 10.67% in the year 2006, and decreased to 10.56% in 2007, and again decreased to 10.20% in 2008, and increased to11.68% in 2009.

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Ratio Analysis at Graph 15:

Interpretation:
Graph showing the capital adequacy ratio of ING VYSYA BANK of past five years. The graph states that the capital adequacy ratio is gradually increasing year to year, this shows the financial position of the company is good and the it also indicates the share holders fund is also high. The above graph states you that there is lot of fluctuations in capital adequacy ratio of ING-VYSYA BANK from year to year.

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Ratio Analysis at Net profit to average working funds:

Table 16:

YEAR 2005 2006 2007 2008 2009

NET PROFIT -38 9 89 157 189

AVG WORKING FUNDS 15271 18113 17098 21257 27122

PERCENTAGE -0.25% 0.05% 0.52% 0.74% 0.70%

Analysis:
From the above table we get to see the information about net profit to average working funds of ING-VYSYA BANK of past five years. In the year 2005 the percentage of net profit to average working funds was negative value -0.257%, in the year 2006 increased to 0.05% and saw a growth in 2007 to 0.52%, and in 2008 increased to 0.74% and decreased to 0.70% in 2009.

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Ratio Analysis at Graph 16:

Interpretation:
Graph showing the net profit to average working funds of ING VYSYA BANK of past five years. The graph states that the net profit to average working funds have grown up from negative value to positive value and it also indicates that the current assets and current liabilities are also high and the company is financial good.

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Ratio Analysis at
.FINDINGS: 1) It is observed that the cost of deposits ratio increased from year to year that is from 4.90% to 6.83%. 2) It is observed that the cost of funds ratio is 5.42% in 2005 and it is decreased in 2006 at 5.29%and it showed again increase in 2007,2008 and 2009 as 5.78%, 6.56%and 6.92% respectively. 3) It is observed that yield on advances ratio have been gradually increased from 8.62% to 11.48%. 4) It is observed that the net interest margin ratio on average earning assets was 2.92% during 2005 and it decreased to 2.79% during 2007 and increased thereafter. 5) It is observed that the credit deposit ratio was decreased during 2008 and 2009 by 71.61% and 67.30%. 6) It is observed that the percentage low cost deposit ratio was decreased during the year 2009 by 26.97%. 7) It is observed that the cost income ratio was 83.62%in 2006 and decreased during the 220,2008 and 2009 by 69.06%, 66.47%and 64.52%. 8) It is observed that the return on average assets was decreased during 2006 and 2009 by 0.06% and 0.71%. 9) It is observed that the return on equity ratio was increased from negative value to positive value that is from 5.28% in 2005 and increased to 11.62%in 2009.

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Ratio Analysis at
10) It is observed that the net interest ration was decreased during 2007, 2008 and 2009 by 60.93%, 54.35% and 54.26% respectively. 11) It is observed that the other income ratio was decreased during the year 2006 by 10.22% and increased thereafter and remains same during 2008 and 2009 by 19.65%. 12) It is observed that the staff cost ratio was decreased during the year 2006 and 2007 by 45.14% and 45.00% and increased thereafter. 13) It is observed that the gross NPA ratio was 4.98% during the year 2005 and decreased thereafter to 4.09% in 2006, 2.55% in 2007 and 1.38% in 2008 and increased during 2009 by 1.86%. 14) It is observed that the net NPA ratio was decreased during the year 2006, 2007 and 2008 by 1.76%, 0.95%, and 0.70% respectively and increased thereafter 15) It is observed that the capital adequacy ratio was decreased during the year 2007 and 2008 by 10.56% and 10.20% and increased thereafter. 16) It is observed that the net profit to average working funds ratio was increased from negative value to positive value that is from the year 2005 to 2008 by 0.257% to 0.74% and decreased during 2009 by 0.70%.

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Ratio Analysis at GENERAL FINDINGS:

1) ATM (Automated teller machine): ING-VYSYA BANK has at present 207 ATMs all over the country. 2) Branches: ING-VYSYA BANK has 480 branches all over the country. 3) Products: ING-VYSYA BANK has a total of 18 products to its credit. 4) Total number of loans: ING-VYSYA BANK offers 8 types of loans

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Ratio Analysis at SUGGESTIONS:

ING-VYSYA Bank has shown a better performance in the parameters like deposits, advances, total assets, other income and profit after tax, cost of deposits, yield on advances and cost of funds. Whereas the net interest income, operating expenses, credit deposits ratio, cost income ratio, return on equity, net profit to average working funds, percentage low cost deposits to total deposits have shown a competitive edge over the industry, At the same time, gross NPA ratio, net NPA ratio, capital adequacy ratio, staff cost/total operating cost, net interest income, return on average assets and net interest margin are areas that need more focus, so that they are on par with the industry as a whole part. Proper planning of internal and external funds is suggested. The company must maintain their issuing of finance effectively. A financial aid for other financial institution and companys has to be effectively utilized. ING VYSYA should finance all sort of companies in India. Customers delight has to be ensured so that they dont divert to other companies.

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Ratio Analysis at CONCLUSION:

The ING VYSYS BANK LIMITED is a company with a history of more than 79years. The company has spread its roots and branches all over the world widely. It has the international partnership, which has added up to its reputation and goodwill. Bank is offering good services to customers at right time Performance of ING-VYSYA BANK is satisfactory in the current year compare to its previous year. Bank is offering more attractive ways to increase its customers. Bank is offering more number of loans schemes for the developments of the business. The net sales of the company and net income of the company has been increasing which shows that increase in sales increase the income and the profitability position of the company is good. ING VYSYA BANK has joined feathers to its wings to render service in various fields such as: 1) ING VYSYA Banking. 2) ING VYSYA Mutual funds 3) ING VYSYA Life insurance.

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Ratio Analysis at SWOT ANALYSIS:

Swot analysis stands for strengths, weakness, opportunities and threats.

STRENGTHS:
o The brand is ING VYSYA BANK LIMITED, dedicated to excellence completely for financing. o VYSYA BANK has international partnership with ING LIMITED. o ING VYSYA group caters to the financial needs of individual and corporate. o ING VYSYA uses modern and top software technologies. o It is a premiere global provider of the best quality.

WEAKNESS:
o There is less diversification.

OPPORTUNITIES:
o More number of competitors. o They are planning to establish their branches all over India. o Market share can be covered at a much possible rate.

THREATS:
o The main threat is from private sector organization because of liberalization.

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