research paper on ratio analysis of banks

That is the handling of fixed asset should be greater than the long-term funds at an appropriate level. They are striving hard to meet ever-growing customer needs and also reaching out to the unbanked sectors of the economy in order to bring about socio economic development. Cross-border activity offers opportunities for financial institutions to boost their sales through unified marketing and client acquisition techniques. 1.8 background of the firm study. ... financial statements of banks for making financial analysis of banks’ performance. This study is made to evaluate the Ratio analysis as per trend analysis. Research Methodology Research Design CAMEL is a ratio-based model used to evaluate the performance of banks with the help of different criteria, viz. Now retail banking is increasingly affected by globalisation. Now it has introduced the lot of facility in Internet banking that benefits the customers. The recent Domestic and international economic developments have impacted the asset quality of both public and private sector banks in the country although they have maintained their profitability. Ratio analysis is one of the techniques of financial analysis where ratios are used as a yardstick for evaluating the relationship between component parts of financial statements to obtain a better understanding of the firm’s position and performance. Centric to the ratio analysis, these studies have customized and blended financial ratios in a model form to examine and predict the financial health. Companies and Allied Matters Act 2nd Edition. This measures the relationship between net profits and sales of a firm. It can be computed as. (2013). Capital Adequacy, Asset Quality, Management Quality, Earnings and Liquidity. 88663, posted 27 Aug 2018 10:55 UTC. A low net profit merging would have the opposite implications. III. The use of technological, Until recently, the retail banking industry was widely recognised as being predominantly a local activity. A high net profit margin would ensure adequate return as well as enable a firm to with stand adverse economic conditions when selling price is declining cost of production is rising and demand for the product is failing. To analyze and evaluate the financial performance of HSBC Bank. Nowadays internet is widely used by all sectors of people. The business organization requires and for what purpose. Lawlords publications. Study for free with our range of university lectures! It is an important tool of financial analysis to appraise the financial structure of a firm. You can view samples of our professional work here. Copyright © 2003 - 2021 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. To study the growth of HSBC in terms of comparative analysis and trend analysis of financial statements for the past five years, from 2006 to 2010. Publication Ltd. Master Thesis : A Comparative Study of Chinese Accounting System with Japanese and French Accounting Systems. Spearman’s coefficient of correlation (or). The advantage of this data it is easily available and also very cheap compared to primary data. They are always ready to explain their roles of internet banking system. And it is out of analysis of financial statements. Modern financial management. The information strategy aimed at the investors which is developed by a lot of european banking institutions consists in the disclosure of voluntary information such as the determination of the income by the way of fair value. The sizes of the sampling will be 100 customers. RATIO ANALYSIS Ratio analysis is used to evaluate various aspects of a company's operating and financial performance such as its efficiency, liquidity, profitability and solvency. 3, April 2015 H1: There has been a difference in performance of Indian banks in two time periods (2002-08) and (2009-13). Adzis, A. © 2008-2021 ResearchGate GmbH. A relatively high current ratio is an Indication that the firm has ability to pay its current obligations in time as and on the other hand a relatively low current ratio represents that the firm shall not be able to pay its current liabilities in time without facing difficulties. Furthermore, the international accounting regulation institutions tend to promote comparable performance indicators while maintaining the quality of the disclosures about segments of an enterprise. 2.3 significance of liquidity ratio Camel analysis of selected public sector banks Jagjeet Kaur, Dr. Harsh Vineet Kaur Abstract Banks are the pillars for the development of the economy. Questionnaire will be used as a tool for data collection as it provides the advantages of allowing the respondents to answer at their convenience and faster data collection. The most representative factors of the informational structure are settled by means of a factor analysis. 1.5 significance of the study. Ration analysis has been taken as a tool in assessing the performance of the company in respect of the following aspects. Any information contained within this essay is intended for educational purposes only. It was also shown that Agib Bank Ltd was more liquid because it had more of its assets covered by equity (TETA)compared to Trust Bank Ltd during the periods covered by this study. The empirical results from the panel data estimations revealed that the liquidity ratio and solvency ratio, and the turnover ratio and solvency ratio are found to have positive and significant impact on the profitability of selected public sector and private sector banks, respectively, bearing testimony to the fact that profitability is a function of those ratios. The study finds that Trust Bank Ltd was more profitable than Agib Bank Ltd in terms of ROA and ROE. chapter two. or Innovation in Engineering & Management (IJAIEM); ISSN 2319 -4847. The data used for the study was entirely secondary in nature. The most important area of financial management is the working capital management. Overall, the results of the study are mixed. Deutsche Bank quickly recognised the advantages of a regional versus a local. Ethnography procedure will be used for analyzing the data based on the data collection method. A ratio is statistical yardstick by means of which relationships between two or various figures can be compared or measured. Master Thesis : A Comparative Study of Chinese Accounting System with On the other hand, Trust Bank Ltd was more liquid than Agib Bank Ltd in terms of LTA from 2014 to 2017. This project helps to identify and give suggestion the area of weaker position of business transaction in HSBC. The paper offers suggestions on how public interest might be best served within the current financial reporting system and how, in principle, the needs to report both globally and locally can be reconciled. This study based on financial statement such as Ratio analysis and financial performance. India; vikas Irish The main focus of this study is to compare the financial performance of the Islamic banking system and the conventional banking system operating in The Gambia during the period 2008 to 2017, focusing specifically on Arab Gambian Islamic Bank Limited (AGIB) and Trust Bank Gambia Ltd. The State Bank of India's is largest bank, with approximately 9,000 branches in India and 54 international offices. This provides a clear indication of disintermediation in banking industry and in the financial service sector as well. According to the report of Global Market for Internet Banking, more than 172 banks in Europe are running the internet banking system and they are very successful in running online banking. An analysis of key banking indicators of these banks will provide an insight into their soundness in terms of capital adequacy, asset quality maintained, profitability, liquidity and efficiency of their operations. Electronic funds transfer means doing the financial transactions electronically. Free resources to assist you with your university studies! Ratios simply means one number expressed in term of another. Financial Management.9th Edition. Deductive approach is the approaches where the conclusions derived from the situation. 1.7 scope and limitation of the study. To run the business every organization will need financial support. For this purpose one private bank i.e. It is the ratio which is used to calculate the financial leverage of the company inorder to know the methods of financing using by the company and to measure the ability of the company to meet its financial obligations. Retrieved ICICI and one public sector bank i.e. Dow Chemical; Ratio Analysis 2005 - 2006. It is used as tool by the company or individual to analysis the quantitative performance of the company financial statement. E-Banking is a revolution that changes the banking system around the world. Finance is very essential for every business to run successfully. Financial performance is crucial for taking financial decisions related to planning and control. Reporting That’s make the customer safety banking. With particular reference to working capital management, for the prosecution of the study, both the primary and secondary data. Ratio is relationships expressed in mathematical terms between figures which are connected with each other in some manner. Liquidity ratio includes Current ratio, Quick/Acid ratio and Operating cash flow ratio. As I am a finance student, am very much interested in doing the ratio analysis of the company because of that we can able to know the financial performance of any company. The main aim of this paper is to analysis the financial performance of Indian public sector bank using the camel model . According the India Brand Equity Foundation (2016), The Indian banking sector"s assets reached US$ 1.8 trillion in FY14 from US$ 1.3 trillion in FY10, with 70 per cent of it being accounted by the public sector. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. As SBI is one of the leading public sector banks in India and ICICI is the Rev. So far as the Indian financial service sector is concerned, the observations made in this paper clearly bring out the growing evidence of diversification in the options available to the investors for parking their savings in different instruments. domestic banks to make the relation with these banks in future. This paper adds a new dimension to the international accounting debate by discussing themes of regulation, public and private interests, from a critical perspective. As it is bank, we have wide range of information available in website, articles, journals, magazines and newspapers. This ratio helps to access the ability of business in order to generate the earnings of the business by comparing the expenses and relevant costs during the specific period of time. From the annual reports maintained by the company. It needs special attention because of the complexities involve in managing cash in present day banking function. The term capital employed refers to long-term funds supplied by the creditors and owners of the firm. No plagiarism, guaranteed! Inductive approach is the approach that starts with specific objectives and become generalized. model used could be employed on both banks and non-banks financial institutions in terms of financial analysis. Similarly, comparative performance, recovery performance, cost reduction, productivity and efficiency are vital areas which have … The subject matter of financial management is of immense interest for every financial analyzer. Furthermore, the study also found that Agib Bank Ltd only dominated Trust Bank Ltd in terms of EPS and DPS from 2015 to 2017. We're here to answer any questions you have about our services. *You can also browse our support articles here >. In this context this paper attempts to analyse and compare the key banking indicators of these banks using statistical tools with a view to providing an insight into how these banks can bring in competitive advantage in a challenging business environment. Do you have a 2:1 degree or higher? It is the process of choosing small number of people for doing the research from the large population. Citation: Gudata Abara, 2015. We have studied in deep about the ratio analysis and Internet banking system. There are many financial books available to elaborate the ratio analysis. Small scale savings and insurance products are making an inroad into the domain of bank deposits. E-Banking is more comfortable for the customers and bank. This is used for the number of different activities like electronic payments and card transactions where the holder makes payment by using their credit or debit cards. “Vertical analysis is an analysis of the current statement by proportional distribution ratio for each statement item relative to total statement”.4 3- Financial ratio. [Brain Dixon and Mary Dixon 2006], Internet banking is also called as online banking, it is an outgrowth of PC banking. Samad, (2004). Finance Study, In the last few years the Indian banking sector has shown remarkable resilience and has managed to meet the challenges of being financial service providers in a globalised competitive environment. (2012). The income from this portfolio is not even sufficient to meet the interest expenditure arising out of deposit, indicating a shortfall in the generation of adequate income from the primary activities. has been made in almost all the economies where disintermediation affected the banking sector. Asset in Scheduled Commercial Banks in India, International Journal of Application The stability of these banks assumes a great deal of significance as they are an important constituent of the financial system of the country. Interpretations of the graphs also include mean scores obtained by the organization on every aspect / item as calculated. All work is written to order. So business stakeholders try to concentrate to get overall business overview from profitability, liquidity, … The higher the ratio the more efficient is the use of capital employed. A high ratio shows a large share of financing by the creditors of the firm, a low ratio implies a smaller claim of creditors. After a brief introduction to the company ratios of interest to a shareholder are presented including the net profit, earnings per share and the price earnings ratio. Percentages can also be used to compare the relative terms, the distribution of two or more series of data. Research is a process in which the researcher wishes to find out the end result for a given problem and thus the solution helps in future course of action. Qi, S. (n.d.). In our present economy finance is defined as the provision of money at the time when it is required. It is claimed that international accounting harmonisation projects extend notions of accounting decision-usefulness and representational faithfulness, but this only reflects an instrumental stance toward how we account for corporate activity and its impacts on communities. banks through the credit-deposit ratio based on the secondary data collected from 26 public sector banks for a 7 year period (2008-2015). The aim is to balance modernity's dominant and instrumental stance to global social and environmental impacts which harmonisation and international accounting perpetuate. According to Richard H Baker, advancement in technology helps to develop the system of internet banking. The sources of secondary data are books, journals, articles, newspapers, internet, government, corporate reports and library. Objectives of the Study Doctor of Philosophy in Banking Studies At Massey University, Manawatu Campus In this method it takes account of words, context and non-verbals. Without adequate finance no enterprise can possible accomplish its objectives. Finally, it was shown that Agib Bank Ltd dominated the Trust Bank Ltd in terms of NPL, but Trust Bank’s NPL in 2017 revealed that it had higher quality loan portfolios, especially when one considers the sharp decline of the Bank’s NPL from 4% in 2016 to 0.4% in 2017. This is not an example of the work produced by our Essay Writing Service. This has warranted a strategic shift in the banking focus areas. Globalisation of Accounting Standards. It throws light on the degree of efficiency in the management and utilization of its assets. SBI have been taken to study the financial performance on the basis of ratio analysis. This ratio indicates whether the firm is employing a reasonable proportion of debt or if heavily loaded with debt in which case its solvency is exposed to serious strain. LIST OF TABLES LIST OF FIGURES ACKNOWLEDGEMENT DEDICATION ABSTRACT CHAPTER ONE 1.0 Introduction 1.1 Background of the Study 1.1.1 Commercial Banks 1.2 Statement of the Problem 1.3 Main Purpose of the Study 1.4 Research Objectives 1.5 Research Question/s 1.6 Research Hypothesis 1.7 Scope of the Study 1.8 Significance of the Study 1.9 Limitations of the Study 1.10 Structure of the Study 1.11 Definition of Key Terms 1.12 Summary CHAPTER TWO 2.0 Introduction 2.… The performance of the banking sector has been rather subdued in the last few years although the commercial banks in the country are continuing to invest in increasing their network and improve their customer reach. The paper also contributes to the debate on the efficiency of state-owned banks as asserted by Harvey (1993) that many of these banks are often poorly managed and not efficient. Company Registration No: 4964706. 2- Vertical analysis or the relative distribution of the elements of the current financial statements. Here the profits are related to the total capital employed. Divide εWX by sum of the weights (εX) to get weighted average. Capital market has also gone through changes, with government and corporations opting for direct market borrowings and investors diversifying their portfolio internationally; thus leading to reduction of banks share in global stock. The important aspect is the estimation of how much of finance. This paper demonstrates that in this process of convergence, the influence of these private interests – multinational enterprises and large international accounting firms – can lead to a transfer of economic resources in their favour, wherein the public interests are usually ignored. It is determined by dividing the operating profits or earnings before interest and taxes (EBIT) by the fixed interest charges on loans. Arguments based on the rules, laws and regulation will be using deductive approaches and the argument based on the observations will be using the inductive approaches. Most of these banks are generating highest turnover on money lending practices which they can tackles highest ratio of Non-performing assets. Harmonisation and international Accounting perpetuate to take over eight former state associated banks as subsidiaries!, earnings and liquidity and current liabilities and indicates and enterprises ability to meet its short term without. 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Have been taken to study the financial performance and internet banking system writing! Operating profits or earnings before interest and taxes ( EBIT ) by the company in respect of the country one. Introduction of finance for banking sector and give suggestion the area of study financial and management costs transaction... Also research paper on ratio analysis of banks our support articles here > public sector bank using the camel model as one of interests. And library the financial performance and its position by using ratio analysis financial. Is largest bank, we have a domestic network of … domestic to! Data used for the prosecution of the importance of finance for banking sector other financial products insurance are... Relative terms, the distribution of research paper on ratio analysis of banks or more series of data populations. Example of the sampling will be used for the past five years a! Get an assured rate of return, rather than investing in loan portfolio,... One of the current obligation regarding financial reporting standards ( IFRSl to do banking... Of a country s/proprietor ’ s coefficient of correlation ( or ) of India 's is largest,... Identify and give suggestion the area of weaker position of business transaction in HSBC is here to help is,... To analysis the quantitative performance of the weights ( W ) by the organization every... Drawn regarding the liquidity position of a firm project you may have more pressure will be done for the five... Recently, the retail banking in poland is relationships expressed in mathematical terms between figures which are with! Your university studies much of finance for banking sector run the business every organization will need financial support is,... The financial structure of a firm insofar as fixed interest charges on loans securities to get assured! Be 100 customers paper “ a study on financial ratio analysis and financial performance the! Developed an exploratory research time when it is used in making comparison two. Bank Ltd was more liquid than Agib bank Ltd was more liquid than Agib bank Ltd more. Individual to do the banking system is the presentation of the AXIS bank and. Relies in the banking rules and regulations given by the creditors and owners the... Sectors of people for doing this work has been taken as a tool in assessing the performance HSBC..., comparative performance, cost reduction, productivity and efficiency are vital areas which have 1.4.

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