KLE SOCIETY’S

INSTITUTE OF MANAGEMENT STUDIES

AND RESEARCH,
VIDYANAGAR, HUBLI - 580 031.

(Affiliated to Karnatak University, Dharwad & Recognized by AICTE, New Delhi)

A PROJECT REPORT ON
A STUDY ON WORKING CAPITAL
MAANAGEMENT OF SBI

Undertaken at The SBI

SUBMITTED TO KARNATAK UNIVERSITY, DHARWAD FOR

PARTIAL FULFILLMENT FOR REQUIREMENTS OF THE
AWARD OF MASTER OF BUSINESS

ADMINISTRATION IN THE ACADEMIC YEAR 2019-20

Submitted by
NETRAVATI MORABAD
MBA II Semester
Reg. No: 19MBA102

INSTITUTE GUIDE

Prof. Saptarshi Mukherjee

Faculty,
KLE IMSR, Hubli
 KLE SOCIETY’S

INSTITUTE OF MANAGEMENT STUDIES

AND RESEARCH,
VIDYANAGAR, HUBLI - 580 031.

(Affiliated to Karnatak University, Dharwad & Recognized by AICTE, New Delhi)

Certificate

This is to certify that Netravati Morabad, Reg. No: 19MBA102 has

successfully completed her Summer In Plant project on “A STUDY ON Working
Capital Management of SBI” in the partial fulfillment of the requirement of
Master of Business Administration, during the academic year 2019-2020 from 1st June 2020
to 31st July 2020.

INSTITUTE GUIDE DIRECTOR

Prof. Saptarshi Mukherjee Dr. P. B. Roodagi

Faculty, Faculty,
KLES IMSR, Hubli KLES IMSR, Hubli
 ACKNOWLEDGEMENT

It is a matter of great pleasure to acknowledge those personalities who have inspired, guided and
contributed immensely in bringing out this Project Report.

I express my sincere thanks to our Director Dr. P. B. Roodagi KLES’s IMSR, Hubli for giving
me an opportunity for learning.

I wish to take this opportunity to express my deep sense of gratitude to Prof. Saptarshi
Mukherjee for his valuable guidance in this Endeavour. He has been a constant source of
inspiration. I sincerely thank him for his suggestions and his help in successfully completing my
project report.

I would like to thank to my parents, my teaching and non-teaching faculties, my friends and all
those who have helped me directly or indirectly for the completion of this project work.

DATE: 31/07/2020 NETRAVATI MORABAD

PLACE: HUBLI MBA IInd SEMESTER

 DECLARATION

I, Netravati Morabad, hereby declare that this project report entitled “A study on
Non-performing assets on Muthoot Finance Limited” has been prepared by me during the
year 2019-2020, under the guidance of Prof. Saptarshi Mukherjee, Faculty, KLE Society’s
Institute of Management Studies and Research, Hubli. The project is towards partial fulfillment
of requirement for the award of Master of Business Administration Karnatak University,
Dharwad.

I, confirm that this report truly represents my work undertaken as a part of my Summer In-plant
Project (SIP) this work is not a replication of work done previously by any other person. I also
confirm that the contents of the report and the views contained therein have been collected and
presented by me.

DATE: 31/07/2020 NETRAVATI MORABAD

PLACE: HUBLI (19MBA102)

 STATE BANK OF INDIA

INDEX

Sl. No. Content Page No.

1 Executive Summary

2 Industry Profile

3 Company Profile

4 Introduction to Study and Literature Review

5 Research Methodology

6 Data Analysis and Interpretation

7 Findings

8 Suggestions

9 Conclusion

10 Annexure

11
Bibliography

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INTRODUCTION TO STUDY

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TOPIC
“A STUDY ON WORKING CAPITAL MANAGEMENT AT SBI BANK
LTD”.

Need for the study on Working Capital Management:

Working capital refers to that part of the firm's capital which is required for financing short-
term or current asset such as cash, marketable securities, debtors and inventories.Funds.thus
invested in current assets Keep revolving fast and are being constantly converted in to cash
and this cash flows out again in exchange for other current assets. Hence it is also know as
revolving or circulating capital or short term capital.

Findings

• As per the study Current Ratio there is fluctuation from last 10 year and it was lowest in the
year 2013.

• As per the study using Quick Ratio there is fluctuation from last 10 year and it was highest
in the year 2020.

• The assets in 2013 were induced more when compared to remaining subsequent year which
resulted in fall in working capital Ratio.

• The company in the year 2020, 2019, and 2012 the firm has negative Net working capital
which indicate the company does not has sufficient amount of money to spend on its day to
day business operation but in the year 2011, 2013, 2014, 2015, 2016, 2017, 2018 the firm has
sufficient amount of money available to spend on its day to day business operation such has
paying short term bills and bank inventory.

Suggestions

• As the company's current Ratio had decreased maximum in the year 2012-2013 by 0.12 and
the company should try to improve the same in the future.

• As per the study using Quick Ratio there is a fluctuation from last 10 year.It was highest in
the year 2020.

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• As in study there is a decrease in Net working Capital, the company should try to

mention sufficient Net Working Capital.

Conclusion

• The project undertaken at State Bank Of India was on the topic “A Study on Working
Capital Management”.

• As per the project undertaken we can see that there are certain areas the company has to
focus more to improve its liquidity position.

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Introduction

The working capital is the life-blood and nerve centre of a business firm. The
importance of working capital in any industry needs no special emphasis. No
business can run effectively without a sufficient quantity of working capital. It is
crucial to retain right level of working capital. Working capital management is one of
the most important functions of corporate management. A business enterprise with
ample working capital is always in a position to avail advantages of any favorable
opportunity either to buy raw materials or to implement a special order or to wait for
enhanced market status. Working capital can be utilized for the payment of lease,
employee's payroll, and pretty much any other operating costs that are involved in
the everyday life of business. Even very successful business owners may need
working capital funds when the unexpected circumstances arise. The overall
success of the company depends upon its working capital position. So, it should be
handled properly because it shows the efficiency and financial strength of company.

Working capital management is highly important in firms as it is used to generate

further returns for the stakeholders. When working capital is managed improperly,
allocating more than enough of it will render management non-efficient and reduce
the benefits of short term investments. On the other hand, if working capital is too
low, the company may miss a lot of profitable investment opportunities or suffer short
term liquidity crisis, leading to degradation of company credit, as it cannot respond
effectively to temporary capital requirements. Efficient management of working
capital means management of various components of working capital in such a way
that an adequate amount of working capital is maintained for smooth running of a
firm and for fulfillment of objectives of liquidity and profitability. But, it is very difficult
for the management too to estimate working capital properly because,

amount of working capital varies across firms over the periods depending upon the
nature of the business, nature of raw material used, process technology used, nature
of finished goods, degree of competition in the market, scale of operation, credit
policy etc. Therefore, a significant amount of fund is required to invest permanently
in the form of different current assets.

Keeping in view the pragmatic importance of working capital management in

finance, an attempt is made in this study to look into the working capital
management of seven associates of State Bank of India.

The specific purposes of the study are:

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To examine the efficiency of working capital management practices of state bank of

India’ associates.

To test how fast the banks have been able to improve their respective level of
efficiency in working capital management with respect to a targeted level (average
among the banks).

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INDUSTRY PROFILE

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Banking in India has its origin as carry as the Vedic period. It is believed that the transition
from money lending to banking must have occurred even before Manu, the great Hindu jurist,
who has devoted a section of his work to deposits and advances and laid down rules relating
to the interest. During the mogul period, the indigenous bankers played a very important role
in lending money and financing foreign trade and commerce. During the days of East India
Company, it was to turn of the agency houses top carry on the banking business. The general
bank of India was the first joint stock bank to be established in the year 1786.The others
which followed were the Bank of Hindustan and the Bengal Bank. The Bank of Hindustan is
reported to have continued till 1906, while the other two failed in the meantime. In the first
half of the 19th Century the East India Company established three banks; The Bank of Bengal
in 1809, The Bank of Bombay in 1840 and The Bank of Madras in 1843.These three banks
also known as presidency banks and were independent units and functioned well. These three
banks were amalgamated in 1920 and The Imperial Bank of India was established on the 27 th
Jan 1921, with the passing of the SBI Act in 1955, the undertaking of The Imperial Bank of
India was taken over by the newly constituted SBI. The Reserve Bank which is the Central
Bank was created in 1935 by passing of RBI Act 1934, in the wake of swadeshi movement, a
number of banks with Indian Management were established in the country namely Punjab
National Bank Ltd, Bank of India Ltd, Canara Bank Ltd, Indian Bank Ltd, The Bank of
Baroda Ltd, The Central Bank of India Ltd .On July 19 th 1969, 14 Major Banks of the
country were nationalized and in 15th April 1980 six more commercial private sector banks
were also taken over by the government. 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

The Indian Banking System:

Banking in our country is already witnessing the sea changes as the banking sector seeks new
technology and its applications. The best port is that the benefits are beginning to reach the
masses. Earlier this domain was the preserve of very few organizations. Foreign banks with
heavy investments in technology started giving some “Out of the world” customer services.
But, such services were available only to selected few- the very large account holders. Then
came the liberalization and with it a multitude of private banks, a large segment of the urban

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population now requires minimal time and space for its banking needs. Automated teller
machines or popularly known as ATM are the three alphabet that have changed the concept
of banking like nothing before. Instead of tellers handling your own cash, today there are
efficient machines that don’t talk but just dispense cash. Under the Reserve Bank of India Act
1934, banks are classified as scheduled banks and non-scheduled banks. The scheduled banks
are those, which are entered in the Second Schedule of RBI Act, 1934. Such banks are those,
which have paid- up capital and reserves of an aggregate value of not less then Rs.5 lakhs and
which satisfy RBI that their affairs are carried out in the interest of their depositors. All
commercial banks Indian and Foreign, regional rural banks and state co-operative banks are
Scheduled banks. Non Scheduled banks are those, which have not been included in the
Second Schedule of the RBI Act, 1934.
The organized banking system in India can be broadly classified into three categories: (i)
Commercial Banks (ii) Regional Rural Banks and (iii) Co-operative banks. The Reserve
Bank of India is the supreme monetary and banking authority in the country and has the
responsibility to control the banking system in the country. It keeps the reserves of all
commercial banks and hence is known as the “Reserve Bank”.

Importance of bank
• Increase supply of money through credit creation.
• Banks help in remitting money from one place to another.
• Growth in banking activity helps in increasing employment opportunities.
• They provide locker service and they are way safe now.
• They provide loans and they make direct investment in industrial sector

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Types of Banks

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1.Schedule banks

Scheduled banks are covered under the 2nd schedule of Reserve Bank Of India act 1934. To
qualify as a scheduled bank, the bank should confirm the following conditions

• Scheduled bank that has a paid up capital of Rs.5 lakh and above qualifies for the
schedule bank category
• A bank requires to satisfy the central bank that its affairs are not carried out in a way
that causes harm to the interest of the depositors
•A bank should be a corporation rather than a sole proprietorship or partnership firm

Commercial banks
Commercial banks are the most important constituents of banking system. These are the
banks which do banking business to earn profit. The principle function of this banks is that
the credit created by these banks is accepted and functions like money as medium of
exchange. These banks do not issue notes but create credit on the basis of their cash deposit.

Public Bank :
The bank which is established, directed, managed, and controlled by the government is
called public bank. When the bank is governed by the management , control, organizing from
the beginning to the organization, it is called public or government bank. Generally , these
banks are stated for service motive not for earning a profit. Sometimes non government
banks are also converted into government bank by nationalization.
some of nationalised bank in India
1.State bank of India
2.Allahabad Bank
3.Indian bank
4.Punjab National Bank
5.Bank of Baroda

Private Bank:

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private banks are privately owned, directed and controlled. Banks that are controlled by the
private sector or individuals. Overall, these banks are owned by private individuals or
corporations and not by the government or co-operative societies. Those banks are enlisted by
the central bank. Indirectly these banks are controlled by the government. Main objective of
the private sector is to earn a profit.
Some of private bank in India
1. HDFC Bank
2. Axis Bank
3. Kotak Mahindra Bank
4. ICICI Bank
5. IBFC Bank

Foreign Bank
A foreign bank is a type of international bank that is obligated to follow the regulation of
both the home and host countries. Because the foreign banks can provide more loan limits are
based on the parent banks capital, foreign banks can provide more loans than subsidiary
banks. Foreign banks are present in India either as representative offices or as branches. Their
principle function is to make credit arrangement for the exports and imports of the country
and these banks deal in foreign exchange.

Some of Foreign Bank

1.Citi Bank
2.Standard chartered bank
3.HSBC Bank
4. DBS Bank

Regional Rural Bank :

RRBs are government banks operating at regional level in different states of India.
Currently there are 43 RRBs inn India along with state government and sponsor bank. They
were set up under the provision of 26 september 1975 ordinance and the RRB act of 1976 to
allocate banking and credit services for agriculture and other rural sectors. They were

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established on recommendation of Narshimham working group. That time almost 70% of

India’s population was based on rural region.

2.Unscheduled Bank

Non scheduled banks refer to the local area banks which are not listed in the second
schedule of Reserve Bank of India. Non scheduled banks are also required to maintain the
cash reserve requirement not with the RBI but with them.

Co-operate Bank :
cooperative banks are registered under the cooperative societies act 1912 and they run by an
elected managing committee, These work on no-profit no loss basis and mainly serve
entrepreneurs, small businesses, industries and self-employment in urban areas. In rural areas,
they mainly finance agriculture-based activities like farming, livestock and hatcheries.
cooperative banks are operated on co-operative lines. Co-operative credit institutions are
organized under a cooperative society’s law and play a significant role in meeting financial
needs in rural areas

Urban co-operative Banks :

Urban co-operative banks refer to the primary cooperative banks located in urban and semi
urban areas. These banks essentially lent to small borrowers and businesses centered around
communities, localities work place groups.
According to the RBI, on 31st march 2003 there were 2104 urban co-operative
Banks of which 56 were scheduled banks. About 79% of these are located in five states
Andhra Pradesh, Gujarat, Karnataka, Maharashtra and Tamil Nadu.

State Co-operative Banks :

A state co-operative bank is a federation of the central cooperative bank which acts as
custodian of the cooperative banking structure in the state.Banks can also be classified on the
basis of scheduled and non scheduled bank. Scheduled banks are also covered under the
depositor insurance program of deposit insurance and credit guarantee corporation, which id
beneficial for all account holders holding a savins and fixed/recurring deposit account.

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payment Bank :
A payment bank is like any other bank, but operating on a smaller scale without
involving any credit risk. In simple words ,it can carry out most banking operations but can’t
accept demand deposits(up to RS.100000)offer remittance services, mobile
payments/transfers/purchases and other banking services like ATM/ debit cards , net banking
and third party fund transfers.

Small Finance Bank:

It is a specific segment of banking created by RBI under the guidance of government of
India with an objective of furthering financial inclusion by primarily undertaking basic
banking activities to unserved and underserved section including small business units.

Investment banks :
An investment bank is a financial intermediary that performs a variety of services.
Most investment banks specialize in large and complex financial transactions, such as
underwriting, acting as an intermediary between a securities issuer and the investing public,
facilitating mergers and corporate reorganizations and acting as a broker or financial adviser
for institutional clients.

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Functions of banking system

Primary functions of Banking system

Accepting deposit :

The bank collects deposits from the public. These deposits can be different types,
such as
• Savings deposits.
• Fixed deposits

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• Current deposits
• Recurring deposits

Saving deposits
saving deposits encourages saving habit among the public. It has low rate of interest.
At present it is about 4% p.a. This account is suitable for salary and wage eaarners.

Fixed deposits
Lump sum amount is deposited at one time for a specific period. Higher rate of interest
is paid, which varies with the period of deposit. Withdrawals are not allowed before the
expiry of the period.

Recurring deposits
This type of account is operated by salaried persons and petty traders. A certain sum of
money is periodically deposited into the bank. Withdrawals are permitted only after the
expiry of certain period.

Current deposits
This type of account is operated by businessmen withdrwals are freely allowed. No
interest is paid.But there are service charges.

Granting loans and advances

The bank advances loans to the business community and othe members of
the public. The rate charged is higher than what it pays on deposits. The difference in the
interest rates is its profit.The types of bank loans and advances are
• Overdraft
• Cash credit
• Loans
• Discounting of bill of exchange

Overdraft

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This type of advances are given to current account holders. No separate account is
maintained. All entries are made in the current account . A certain amount is sanctioned as
overdraft which can be withdrawn within a certain period of time of three months or so.It is
sanctioned to businessman and firm.

Cash credits
The client is allowed cash credit upto a specific limit fixed in advance. It can be given
to current account holders as well as to others who do not have an account with bank.
separate cash credit amount is maintained. Interest is charged on the amount withdrawn in
excess limit.

Loan
It is normally for short term say a period of one year or medium term say a period of
five years. Now a days, banks do lend money for long term. Repayment of money can be in
the lumpsum amount. Interest is charged on the actual amount sanctioned, whether
withdrawn or not. The rate of interest may be slightly lower than what is charged on
overdrafts and cash credits.

Discounting of bill of exchange

The bank can advance money discounting or by purchasing bills of exchange both
domestic and foreign bills. The bank pays the bill amount to the drawer or the beneficiary of
the bill by deducting usual discount charge.

Secondary function
Agency Functions :

The bank acts as an agent its customers. The bank performs a number of agency
functions which includes
• Transfer of funds
• Collection of cheques
• Periodic payments
• Portfolio management
• Periodic collection
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Transfer of fund
The bank transfer fund from one branch to another from one place to another

Collection of cheques
The bank collects the money of the cheques through clearing section of its
customer. The bank also collects money of the bills of exchange.
Periodic payments
On standing instruction of the client, the bank makes periodic payments in respect
of electricity bills, rent, etc.

Portfolio management
The banks also undertakes to purchase and sell the shares and debentures on behalf
of the clients and accordingly debits or credits the account. This facility is called portfolio
management.

Periodic collections
The bank collects salary, pension, dividend and such other periodic collections on
behalf of the client.

General utility functions

The bank also performs general utility functions, such as

• Issue of drafts and letter of credits
• Locker facility
• Underwriting of shares
• Dealing in foreign exchange
• Project reports
• Social welfare programmes

Issue of drafts and letter of credits

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Banks issue drafts for transferring money from one place to another. It also issues letter
of credit especially in case of, import trade . It also issues travellers cheques.

Locker facility
The bank provides a locker facility for the safe custody of valuable document, gold
ornaments and other valuables.

Underwriting of shares
The bank underwrites shares and debentures through its merchant banking division.

Dealing in foreign exchange

The commercial banks are allowed by RBI to deal in foreign exchange.

Project Reports
The bank may also undertake to prepare reports on behalf of its clients.

Social welfare programmes

It undertakes social welfare programmes , such as adult literacy programmes, public
welfare campaigns, etc

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ORGANISATION PROFILE

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INTRODUCTION

Evolution of SBI:

Born as Bank of Calcutta (2 June 1806).

Renamed Bank of Bengal (2 January 1809).

Bank of Bombay (15 April 1840).

Bank of Madras (1 July 1843).

All three were called Presidency Banks.

Amalgamated as Imperial Bank of India on 27 January 1921.

Not only many financial institution in the world today can claim the antiquity and majesty of
the State Bank Of India founded nearly two centuries ago with primarily intent of imparting
stability to the money market, the bank from its inception mobilized funds for supporting
both the public credit of the companies governments in the three presidencies of British India
and the private credit of the European and India merchants from about 1860s when the Indian
economy book a significant leap forward under the impulse of quickened world
communications and ingenious method of industrial and agricultural production the Bank
became intimately in valued in the financing of practically and mining activity of the Sub-
Continent Although large European and Indian merchants and manufacturers were

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undoubtedly thee principal beneficiaries, the small man never ignored loans as low as Rs.100
were disbursed in agricultural districts against glad ornaments. Added to these the bank till
the creation of the Reserve Bank in 1935 carried out numerous Central – Banking functions.

Adaptation world and the needs of the hour has been one of the strengths of the Bank, In the
post depression exe. For instance – when business opportunities become extremely
restricted, rules laid down in the book of instructions were relined to ensure that good
business did not go post. Yet seldom did the bank contravenes its value as depart from sound
banking principles to retain as expand its business. An innovative array of office, unknown to
the world then, was devised in the form of branches, sub branches, treasury pay office, pay
office, sub pay office and out students to exploit the opportunities of an expanding economy.
New business strategy was also evaded way back in 1937 to render the best banking service
through prompt and courteous attention to customers.

A highly efficient and experienced management functioning in a well defined organizational

structure did not take long to place the bank an executed pedestal in the areas of business,
profitability, internal discipline and above all credibility A impeccable

financial status consistent maintenance of the lofty traditions if banking an observation of a

high standard of integrity in its operations helped the bank gain a pre- eminent status. No
wonders the administration for the bank was universal as key functionaries of India
successive finance minister of independent India Resource Bank of governors and
representatives of chamber of commercial showered economics on it.

Modern day management techniques were also very much evident in the good old days years
before corporate governance had become a puzzled the banks bound functioned with a high
degree of responsibility and concerns for the shareholders. An unbroken records of profits
and a fairly high rate of profit and fairly high rate of dividend all through ensured
satisfaction, prudential management and asset liability management not only protected the
interests of the Bank but also ensured that the obligations to customers were not met. The
traditions of the past continued to be upheld even to this day as the State Bank years itself to
meet the emerging challenges of the millennium.

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ABOUT LOGO

Togetherness is the theme of this corporate loge of SBI where the world of banking services
meet the ever changing customers needs and establishes a link that is like a circle, it indicates
complete services towards customers. The logo also denotes a bank that it has prepared to do
anything to go to any lengths, for customers.

The blue pointer represent the philosophy of the bank that is always looking for the growth
and newer, more challenging, more promising direction. The key hole indicates safety and
security.

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MISSION, VISION AND VALUES

MISSION STATEMENT:

To retain the Bank’ s position as premiere Indian Financial Service Group, with world class
standards and significant global committed to excellence in customer, shareholder and
employee satisfaction and to play a leading role in expanding and diversifying financial
service sectors while containing emphasis on its development banking rule.

VISION STATEMENT:

 Premier Indian Financial Service Group with prospective world-class

Standards of efficiency and professionalism and institutional values.

 Retain its position in the country as pioneers in Development banking.

 Maximize the shareholders value through high-sustained earnings per

Share.

 An institution with cultural mutual care and commitment, satisfying and

Good work environment and continues learning opportunities.

VALUES:
 Excellence in customer service
 Profit orientation
 Belonging commitment to Bank
 Fairness in all dealings and relations
 Risk taking and innovative

 Team playing

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 Learning and renewal

 Integrity
 Transparency and Discipline in policies and systems.

ORGANISATION STRUCTURE

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PRODUCTS AND SERVICES

PRODUCTS:

State Bank Of India renders varieties of services to customers through the following
products:

Personal Loan Product:

• SBI Term Deposits

• SBI Recurring Deposits

• SBI Housing Loan

• SBI Car Loan

• SBI Educational Loan

• SBI Personal Loan

• SBI Loan For Pensioners

• Loan Against Mortgage Of Property

• Loan Against Shares & Debentures

• Rent Plus Scheme

• Medi-Plus Scheme

• Rates Of Interest

SERVICES:

• Domestic Treasury

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• SBI Vishwa Yatra Foreign Travel Card

• Broking Services
• Revised Service Charges
• ATM Services
• Internet Banking
• E-pay
• E-Rail
• RBIEFT
• Safe Deposit Locker
• Gift Cheques
• MICR Codes
• Foreign inword Remittances

ATM SERVICES

STATE BANK NETWORKED ATM SERVICES

State Bank offers you the convenience of over 8000 ATMs in India, the largest network in
the country and continuing to expand fast! This means that you can transact free of cost at the
ATMs of State Bank Group (This includes the ATMs of State Bank of India as well as the
Associate Banks – namely, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State
Bank of Indore, State Bank of Mysore, State Bank of Patiala, State Bank of Saurashtra, and
State Bank of Travancore) and wholly owned subsidiary viz. SBI Commercial and
International Bank Ltd., using the State Bank ATM-cum-Debit (Cash Plus) card.

KINDS OF CARDS ACCEPTED AT STATE BANK ATMs

Besides State Bank ATM-Cum-Debit Card and State Bank International ATM-Cum-Debit
Cards following cards are also accepted at State Bank ATMs: -

1) State Bank Credit Card

2) ATM Cards issued by Banks under bilateral sharing viz. Andhra Bank,Axis Bank, Bank
of India, The Bank of Rajasthan Ltd., Canara Bank, Corporation Bank, Dena Bank, HDFC

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Bank, Indian Bank, Indus Ind Bank, Punjab National Bank, UCO Bank and Union Bank of
India.

3) Cards issued by banks (other than banks under bilateral sharing) displaying Maestro,
Master Card, Cirrus, VISA and VISA Electron logos

4) All Debit/ Credit Cards issued by any bank outside India displaying Maestro, Master Card,
Cirrus, VISA and VISA Electron logos

Note: If you are a cardholder of bank other than State Bank Group, kindly contact your Bank
for the charges recoverable for usage of State Bank ATMs.

STATE BANK INTERNATIONAL ATM-CUM-DEBIT CARD

Eligibility:

All Saving Bank and Current Account holders having accounts with networked branches and
are:

• 18 years of age & above

• Account type: Sole or Joint with “ Either or Survivor” / “ Anyone or Survivor”

• NRE account holders are also eligible but NRO account holders are not.

Benefits:

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• Convenience to the customers traveling overseas

• Can be used as Domestic ATM-cum-Debit Card

• Available at a nominal joining fee of Rs. 200/-

• Daily limit of US $ 1000 or equivalent at the ATM and US $ 1000 or equivalent at Point of
Sale (POS) terminal for debit transaction

Purchase Protection*up to Rs. 5000/- and Personal Accident cover*up to Rs. 2,00,000/-

• Charges for usage abroad: Rs. 150+ Service Tax per cash withdrawal Rs. 15 + Service Tax
per enquiry.

State Bank ATM-cum-Debit (State Bank Cash plus) Card:

India’ s largest bank is proud to offer you unparalleled convenience viz. State Bank ATM-
cum-Debit(Cash Plus) card. With this card, there is no need to carry cash in your wallet. You
can now withdraw cash and make purchases anytime you wish to with your ATM-cum-Debit
Card.

Get an ATM-cum-Debit card with which you can transact for FREE at any of over 8000
ATMs of State Bank Group within our country.

SBI GOLD INTERNATIONAL DEBIT CARDS

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E-PAY

Bill Payment at Online SBI (e-Pay) will let you to pay your Telephone, Mobile, Electricity,
Insurance and Credit Card bills electronically over our Online SBI website

E-RAIL

Book your Railways Ticket Online.

The facility has been launched wef Ist September 2003 in association with IRCTC. The
scheme facilitates Booking of Railways Ticket Online.

The salient features of the scheme are as under:

• All Internet banking customers can use the facility.

On giving payment option as SBI, the user will be redirected to onlinesbi.com. After logging
on to the site you will be displayed payment amount, TID No. and Railway reference no.

•. The ticket can be delivered or collected by the customer.

• The user can collect the ticket personally at New Delhi reservation counter .

• The Payment amount will include ticket fare including reservation charges, courier charges
and Bank Service fee of Rs 10/. The Bank service fee has been waived unto 31st July 2006.

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SAFE DEPOSIT LOCKER

For the safety of your valuables we offer our customers safe deposit vault or locker facilities
at a large number of our branches. There is a nominal annual charge, which depends on the
size of the locker and the centre in which the branch is located.

NRI HOME LOAN

SALIENT FEATURES

Purpose of Loan
Loans to NRIs & PIOs can be extended for the following purposes.

• To purchase/construct a new house / flat

• To repair, renovate or extend an existing house/flat

• To purchase an existing house/flat

• To purchase a plot for construction of a dwelling unit.

• To purchase furnishings and consumer durables, as a part of the project cost

AGRICULTURE / RURAL
State Bank of India Caters to the needs of agriculturists and landless agricultural labourers
through a network of 6600 rural and semi-urban branches. here are 972 specialized branches
which have been set up in different parts of the country exclusively for the development of
agriculture through credit deployment. These branches include 427 Agricultural Development
Branches (ADBs) and 547 branches with Development Banking Department (DBDs) which
cater to agriculturists and 2 Agricultural Business Branches at Chennai and Hyderabad
catering to the needs of hitech commercial agricultural projects.

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Porter Five Force Model

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Competitive Rivalry - High:

Every bank attempts to lure costomers away from competitors bank customer what the best
services at the lowest rates at the fastest pace thus,the competitive Rivalry is very high for
SBI.

Threat of new entrants low:

India's banking sector regularly reforms also limit the presence of foreign bank in
Indian,future lowering this threat for SBI.Thus,the threat of new entrants is low of SBI.

Bargaining power of suppliers - low:

The suppliers of SBI can be divided into two categories, first are those who supply materials
like stationery and other required good and second category are the service providers.The
human resource the suppliers are in large number making the switching cost of SBI very
low.Second category can be attracted by other bank with better offers of employment over
all, the bargaining power of the suppliers against SBI is low.

Bargaining power of Buyers:

SBI is not in a position to attempts to influence the customers or raise its Service changes.
Therefore,the bargaining power of the buyers against SBI is high.

Threat of substitutes medium:

Many companies such as Microsoft Sony,and General motors offer financing solution to
customers who buy in bulk or buy big ticket items however,due to the large size of SBI these
substitutes present only a mild threat against SBI.

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McKinsey 7S Framework

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Strategy:
At SBI mutual fund we know that every investors has unique financial goals and requires a
different set of products. Each scheme is managed by devicing a different strategy which is
reflective of the investors profile and carries with its different risk and rewards.

Structure:
Structure tell us in the organisation who reports to whom.He/ she will do what and he/she
work reported whom these all information helps to take decision making in the organisation.

Skills:
The company employees must to know the new technical skills like online business and
management information system skills etc. And how to adopted that skills in the organisation
and Employees must to behave with the customer in corporate word.

Style:
Style includes the leadership style of the top management and overall operating style of the
organisation .style impacts the norms people follow and they work and interact with each
other with customers.

Staff:
The staffing procedure mainly includes how the organisation has to look into its people,their
backgrounds,and competencies.Staff also includes the organisation approaches to
recruitment, selection and specialisation.

System:
Systems in their frame work stands for the rules and regulations, procedures and practices
that must be allowed to carry out the tasks in the organisation.A good system adds to the
efficient and effective work for the enterprenuer.

Shared value:
Team work, transparency, courage,intergrity, these all are the core value of SBI mutual fund
each individual work hands- hand to common organisation goals, create a culture of openness
internally communicating discloser policy and standards to external word true to self and to

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all our stockholders.To take a right decision without any fear or favour in the best interest of
all our stake holders.The employees share responsibility and protect the companies name and
intergrity.

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SWOT ANALYSIS

Strength

The keys strength areas of SBI BANK Bank are its motivated and highly competent staff

who are aggressive in their pursuit for excellence in terms of employee competence it

rivals the highly rated foreign banks.

Weakness

Though SBI BANK Bank has wide coverage of ATM Network through out the country it

is not considered adequate keeping in view is wide customer base.

Opportunity

SBI BANK Bank has good opportunity in Rural area and offices etc. which are still

untouched by banks of such repute are considered virgin markets.

Threat

Other banks like ICICI, SBI, UTI, IDBI etc are expanding at a very fast rate and are

perceived as threat to SBI BANK Bank.

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WORKING CAPITAL
MANAGEMENT

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Meaning and definition of working capital:

Meaning of working capital:

Working capital in simple terms is the amount of funds, which company must have to
finance its day-to-day operations, it can be regarded as part/portion of capital, which is
employed in short operation.
Every organization invests their funds in to terms of capital namely.
1.Fixed capital.
2.Working capital.

The amount invested in accounts like plant and machinery, building, furniture etc.
blocked on permanent bases is called fixed capital. Organization not only requires fixed
capital but also need of fund to meet day-to-day operations for short term purpose such funds
is called working capital.
A Study of working capital is of major part external and internal analysis because of
its close relationship with current day to day operation business. Working capital consists
broadly for the position or the assets of the business that are used at related current operations
and it’s represented by raw material. Stores, work in process and finished goods merchandise,
note or bills receivable.

Definition of working capital:

According to Gerestenberg working capital as, “circulating capital means current assets of a
company that are change in the ordinary course of business from one form to another as for
example, from cash to inventories, inventories to receivables and receivables to cash.”
According toShubin “Working capital is the amount of funds necessary to cover the cost of
operating the enterprise.”

NEED OF THE WORKING CAPITAL

The need for working capital (gross) or current assets cannot be over emphasized. As the
objective of financial decision making is to maximize the shareholder’s wealth, it is necessary

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to generate sufficient profits. The extent to which profits can be earned will naturally depend
upon the magnitude of the sales, among other things. A successful sales program is, in other
words, necessary for earning profits by any business enterprise. However, sales do not
convert into cash instantly; there is invariably a time lag between the sale of goods and the
receipt of cash. There is, therefore, a need for working capital in the form of current assets to
deal with the problem arising out of the lack of immediate realization of cash against goods
sold. Therefore, sufficient working capital is necessary to sustain sales activity.
Technically, this is referred to as the operating or cash-cycle. The operating cycle can be said
to be at the heart of the need for working capital. The continuing flow from cash to suppliers,
to inventory, to accounts receivable and back into cash. The cycle refers to the length of time
necessary to complete the following cycle of events:
1) Conversion of cash into inventory.
2) Conversion of raw materials into work in progress
3) Conversion of work in progress into finished goods
4) Conversion of finished goods into account receivable
5) Conversion of account receivable into cash

MEASURING TOOLS

The project titled Working capital is the analysis of the Working capital ratio (Current
ratio) at Tata Hitachi Equipment Construction Company Limited.

WORKING CAPITAL (WC):

Working capital is the difference between current assets and current liabilities. It is
amount of funds for financing the day to day operations or activities. Higher working capital
is an indication of efficient management. It is calculated as follows.

Advantages of working capital:

•Its helps to know the financial positions of the company.
• The financial analysis of this report will show the strength and weakness of the
company.
• Financial analysis will help the firm to take decisions.

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• It enables a company to avail cash discounts on the purchase and hence, it reduces
costs.
• It enables to make regular payments of salaries, wages and other day-to-day
commitments which raise the morale of its employees, increases their efficiency.

Disadvantages of having working capital.

• The business cannot earn a fair return on its investment, because excess working
capital does not earn anything for the business, whereas the profits are distributed on
the whole of its capital, thus bringing down the rate of return to the shareholders.
• Excess capital may prompt the management to purchase unnecessary assets,
inventories and to carry experimental plans, which may not earn any profit to the
concern resulting in waste of resources.
• A concern with surplus working capital shows a sign of poor grade management.
• Firms having the adequate working capital may not develop useful links with
banking undertakings, whose assistance is inevitable in time of need and urgency.

CLASSIFICATION OF WORKING CAPITAL

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1. Value Based

• Gross Working Capital

• Net Working Capital

Gross working capital:

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Gross working capital refers to the firm’s total investment in current assets.
Current assets are the assets which can be converted into cash within an accounting year and
include cash, short-term securities, debtors, bills receivable and stock.

Net working capital:

Net working capital refers to the difference between current assets and current liabilities.
Current liabilities are those claims of outsiders which are expected to mature for payment within
an accounting year and include creditors, bills payable and outstanding expenses

Time based
Permanent/Fixed Working Capital

Temporary/Variable Working Capital

Permanent or fixed working capital

It is the minimum level of working capital in terms of current asset which is always
required by the firm to carry on its business operations. This part of working capital is fixed
irrespective of changes in the operations.

Temporary or variable or fluctuating working capital

It is a type of working capital which keeps on fluctuating from time to time
depending on business activities. It indicates the need for additional current asset required at
different times.

Importance of working capital

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Higher Return on capital

Firms with lower working capital will post a higher return on capital. Therefore,
shareholders will benefit from a higher return for every dollar invested in the business.
Improved Credit Profile and Solvency
The ability to meet short-term obligations is a pre-requisite to long-term solvency. And
it is often a good indication of counterparty’s credit risk. Adequate working capital
management will allow a business to pay on time its short-term obligations. This could
include payment for a purchase of raw materials, payment of salaries, and other operating
expenses.
Higher Liquidity
A large amount of cash can be tied up in working capital, so a company managing it
efficiently could benefit from additional liquidity and be less dependent on external
financing. This is especially important for smaller businesses as they typically have limited
access to external funding sources. Also, small businesses often pay their bills in cash from
earnings so efficient working capital management will allow a business to better allocate its
resources and improve their cash management.
Increased Business Value
Firms with more efficient working capital management will generate more free cash
flows which will result in higher business valuation and enterprise value.

Favorable Financing Conditions

A firm with a good relationship with its trade partners and paying its suppliers on time
will benefit from favorable financing terms such as discount payments from its suppliers and
banking partners.

Uninterrupted Production
A firm paying its suppliers on time will also benefit from a regular flow of raw
materials, ensuring that the production remains uninterrupted and clients receive their goods
on time.

Ability to Face shock and Peak Demand

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Efficient working capital management will help a firm to survive through a crisis or
ramp up production in case of an unexpectedly large order.

Competitive Advantage
Firms with an efficient supply chain will often be able to sell their products at a
discount versus similar firms with inefficient sourcing.

Factors determining Working Capital

Terms of Credit
Another important factor that determines the amount of working capital requirements relates
to the terms of credit allowed to the customers. For instance, an enterprise may allow only 15
days credit, while another may allow 90 days credit to its customers. Besides, an enterprise
may extend credit facilities to its all customers, while another enterprise in the same business
may extend credit only to select and those too reliable customers only. Then, the
requirements for working capital will naturally be more if the credit period is longer and
credit facilities are extended to all customers, no matter reliable or non-reliable they are. This
is because there will be longer balance of debtors and that too for a relatively longer period
which will obviously demand for more capital.
On the contrary, if supplies of raw materials are available on favourable conditions or terms
of credit i.e., the payment will be made after a relatively longer period of time, the
requirement for working capital will be correspondingly smaller.
Turnover of Inventories
If inventories are large in size but turnover is slow, the small-scale enterprise will need more
working capital. On the contrary, if inventories are small but their turnover is quick, the
enterprise will need a small amount of working capital.

Nature of Business:
The requirement of working capital also varies among the enterprises depending upon the
nature of the business. For instance, trading companies require more working capital than
manufacturing companies. This is because that the trading business requires large quantities
of goods to be held in stock and also carry large amounts of working capital than
manufacturing concerns.

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In both these types of businesses, the value of current assets is 80% to 90% of the value of
total assets. The investment in current assets is relatively smaller in the case of hotels and
restaurants because they mostly have cash sales, and only small amounts of debtors’
balances.

Working Capital Cycle

The working capital cycle is a measure of how quickly a business can turn its current assets
into cash. Understanding how it works can help small business owners like you manage their
company’s cash flow, improve efficiency, and make money faster.
The longer the working capital cycle is, the more time it takes for your business to get a good
cash flow. It’s common for businesses to manage their cycle by revising each step where
possible. This could be by selling inventory quicker, collecting payment sooner, and paying
bills later on.

There are three main steps in the cycle:

Pay for assets (for example inventory to sell or equipment for a job).
Sell inventory (or complete the job for a customer).
Receive payment on what you’ve sold (funds now available to pay costs)

Meaning of Current Assets and Laiblities

Current Asset
Current assets are all the assets of the company that are expected to be sold or used as a result
of standard business operations over the next year.Current assets include cash, cash
equivalents, account receivable, stock inventory, marketable securities, prepaid liabilities, and
other liquid assets.

Current liabilities
In accounting, Current Liabilities are often understood as all liabilities of the business that are
to be settled cash with in the fiscal year or the operating cycle of a given firm, whichever
period is longer.

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RESEARCH METHODOLOGY

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Objectives
To understand the sources and uses of working capital management of SBI.
To understand the effective utilisation of assets and liabilities of SBI.
To analyse the importance of working capital and it's requirement in SBI
To understand the financial statement analys

Methodology
The quality of the project work depends on the methodology adapted for the study and also it
depends upon the nature of the project work. Use proper way of research methodology is very
essential part of any research. In order to conduct a study scientifically, suitable methods and
measures are to be followed.

Research Design
The type of research used for collection and analysis of the data is “Historical Research
Method”. The main source of data for this particular study is the past records prepared by the
bank. The main focus of this study is to determine the working capital management of SBI
Bank. The data regarding bank history and profile are collected through “Exploratory
Design” particularly through the study of secondary sources.

Data collection method

Secondary Data
Secondary data has been obtained from published reports like the annual reports of the
company, balance sheets, and profit and loss account, booklets, records such as files, reports
maintained by the company.

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Data Analysis and Interpretation

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RATIOS RELATING TO WORKING CAPITAL

• Current Ratio :The current ratio measures the ability of the firm to meet its current
liabilities. It measures short term debt paying ability. Current assets include cash and other
assets convertible or meant to be converted into cash during the operating cycle of the
business (which is of not more than a year). Current liabilities mean liabilities payable within
a year’s time either out of existing current assets or by creation of new current liabilities. It
also represents the margin of safety for creditors. As a conventional rule a current ratio of 2:1
or more is considered to be satisfactory.

Current ratio = Current assets

Current liabilities

Years Current Current Current ratio

asset(Cah+Bank+Advance liabilities(Other
Tax+ Stationary and stamps) Liabilities and
Provisions)

2020 2856398732 1631101041 1.751208944

2019 246968546 1455972955 0.169624405
2018 2095518119 1671380768 1.253764647
2017 1808766394 1552351885 1.165178083
2016 1802686164 1598755746 1.127555706
2015 1842232469 1376980357 1.33787854
2014 1444301427 9641296 1.49803659
2013 120251622 954550670 0.125977201
2012 1055020067 809150946 1.303860636

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2011 1288209837 1052483893 1.22397107

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Interpretation
It can be seen from the above chart that during the year 2020 is 1.75, in 2019 it was 0.16,
in 2018 it was 1.25, in 2017 it was 1.16, in 2016 it was 1.12, in 2015 the current ratio was
1.33, in 2014 it was 1.49, in 2013 it was 0.12, in 2012 it was 1.30, and 2011 the Current
ratio was 1.22.

• Quick/ Acid Test/ Liquid Ratio:This ratio is also termed as “Acid Test Ratio” or
“Liquid Ratio.” This ratio is ascertained by comparing the liquid assets (i.e. assets which are
immediately convertible into cash without much loss) to current liabilities prepaid expenses
and stock are no taken as liquid assets. The ratio is also an indicator of short term solvency of
the company. It measures the short term liquidity i.e. it measures short term debt paying
ability. Higher the ratio better the coverage standard ratio is 1:1.

Quick ratio = Quick assets

Current liabilities

Years Quick assets(current Current liabilities Quick ratio

asset – Insurance-
Law Charges)

2020
2821604902 1631101041 1.729877445
2019 2438612554 1455972955 1.674902371
2018 2065928966 1671380768 1.236061229
2017 1787578475 1552351885 1.151529168
2016 1783710789 1598755746 1.115686867
2015 1824372643 1376980357 1.324908256
2014 1421330427 9641296 1.474210964
2013 1214374678 954550670 1.272195093
2012 1044212501 809150946 1.290503961
2011 1288208917 1052483893 1.223970196

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Interpretation
It can be seen from the above chart that during the year 2020 is 1.72, in 2019 it was 1.67, in
2018 it was 1.23, in 2017 it was 1.15, in 2016 it was 1.11, in 2015 the Acid ratio was 1.32, in
2014 it was 1.47, in 2013 it was 1.27, in 2012 it was 1.24,2010 the Acid ratio was 0.85

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• Working Capital Ratio

It is computed by dividing net sales by net current assets. This ratio indicates the
effective utilization of working capital to make sales.

Working capital ratio = Net sales

Net Current assets

Years Net sale (Interest NetCurrent Assets Working Capital

Earned) Ratio
2020 2573235922 2856398732 0.900867198
2019 2428686535 246968546 9.833991309
2018 2204993156 2095518119 1.052242467
2017 1755182404 1808766394 0.970375395
2016 1636853061 1802686164 0.90800778
2015 1523970742 1842232469 0.87241278
2014 1363508039 1444301427 0.944060577
2013 1196570990 120251622 9.950560085
2012 1065214534 1055020067 1.009662818
2011 813943638 1288209837 0.631840881

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Interpretation
It can be seen from the above chart that during the year 2020 is 0.90, in 2019 it was 9.83,in
2018 it was 1.05, in 2017 it was 0.97, in 2016 it was 0.90, in 2015 the working capital ratio
was 0.87, in 2014 it was 0.94, in 2013 it was 9.95, in 2012 it was 1.00, 2011 the working
capital ratio was 0.63.

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• Return on Shareholder’s Fund

It is called ‘Return on Net Worth Ratio’ or ‘Return on Proprietor’s funds’.It determines
the profitability of the company.

Return on Shareholders Fund = Net Profit After Tax *100

Shareholder's Fund

Years Net Profit Shareholder’s Return on

Fund(Capital+reserves) shareholder’s fund
2020 144881106 2320074275 6.244675334
2019 8622298 2209138245 0.390301422
2018 65474537 2191285603 2.987950859
2017 104841026 1882860626 5.568177726
2016 99506537 144274436 68.97031779
2015 131015720 1284382265 10.20067962
2014 108911717 1182822496 9.207782010
2013 141049849 988836854 14.26421845
2012 117072886 839512058 13.94534895
2011 82645190 649860432 12.71737529

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Interpretation
It can be seen from the above chart that during the year 2020 is 6.2 , in 2019 it was 0.3, in
2018 it was 2.9, in 2017 it was 5.5, in 2016 it was 68.9, in 2015 the Return on Shareholder's
Fund was 10.2, in 2014 it was 9.2, in 2013 it was 14.2, in 2012 it was 13.9, 2011 the Return
on Shareholder's Fund was 12.7.

• Current Assets Turnover Ratio:

The asset turnover ratio is an efficiency ratio that measures a company’s ability to generate sales
from its assets by comparing net sales with average total assets.

Current assets turnover ratio : sales

Total current assets

Years sales Total Current Current Assets

Assets Turnover Ratio
2020 2573235922 2856398732 0.900867198
2019 2428686535 246968546 9.833991309
2018 2204993156 2095518119 1.052242467
2017 1755182404 1808766394 0.970375395
2016 1636853061 1802686164 0.90800778
2015 1523970742 1842232469 0.87241278
2014 1363508039 1444301427 0.944060577
2013 1196570990 120251622 9.950560085
2012 1065214534 1055020067 1.009662818
2011 813943638 1288209837 0.631840881

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Interpretation
It can be seen from the above chart that during the year 2020 is 0.90, in 2019 it was 9.83,in
2018 it was 1.05, in 2017 it was 0.97, in 2016 it was 0.90, in 2015 the current assets turnover
ratio was 0.87, in 2014 it was 0.94, in 2013 it was 9.95, in 2012 it was 1.00, 2011 the
current assets turnover ratio was 0.63.

• Net Working Capital:

Net Working Capital = Current Assets – Current Liabilities

Years Current Assets Current Liabilities Net Working

Capital
2020 2856398732 1631101041 -1225297691
2019 246968546 1455972955 -1209004409
2018 2095518119 1671380768 424137351
2017 1808766394 1552351885 256414509
2016 1802686164 1598755746 203930418
2015 1842232469 1376980357 465252112
2014 1444301427 9641296 1434660131
2013 120251622 954550670 834299048
2012 1055020067 809150946 -245869121
2011 1288209837 1052483893 235725944

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Interpretation
It can be seen from the above chart that the Net working capital for the current year 2020
is -1225297691, in 2019 it was -1209004409, in 2018 it was 424137351, in 2017 it was
256414509, in 2016 it was 203930418, in 2015 the Net working capital was 465252112,
in 2014 it was 1434660131, in 2013 it was 834299048 , in 2012 it was -245869121 for
2011 it is 235725944 .

• Gross working Capital:

Gross Working Capital = Total Of Current Assets

Years Total Of Current assets

2020 2856398732
2019 246968546
2018 2095518119
2017 1808766394
2016 1802686164
2015 1842232469
2014 1444301427
2013 120251622
2012 1055020067
2011 1288209837

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Interpretation
It can be seen from the above chart that the Gross working capital for the current year
2020 is 2856398732, in 2019 it was 246968546, in 2018 it was 2095518119, in 2017
1808766394 was 1802686164, in 2016 it was 1842232469, in 2015 the Gross working
capital was 1444301427, in 2014 it was 120251622, in 2013 it was 1055020067 in 2012
it was for 2011 it is 1288209837 .

• Total Asset Turnover Ratio

It measures the efficiency in the use of total assets. It measures the per rupee sales
generated by the per rupee of total assets.

Total Asset Turnover Ratio = Net Sales

Total Assets

Years Net sales Total assets Total Asset

Turnover Ratio
2020 2573235922 39513939180 0.065122232
2019 2428686535 36809142489 0.065980524
2018 2204993156 34547519966 0.063824933
2017 1755182404 27059663041 0.064863424
2016 1636853061 22590630328 0.072457166
2015 1523970742 20480797998 0.074409734
2014 1363508039 179223460 7.607865839
2013 1196570990 15662610403 0.076396651
2012 1065214534 13355192307 0.079760329
2011 813943638 12237362005 0.066512998

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 STATE BANK OF INDIA

KLE Society’s Institute of Management Studies and Research, Hubli Page 65

 STATE BANK OF INDIA

Interpretation
It can be seen from the above chart that during the year 2020 is 0.06, in 2019 it was 0.06, in
2018 it was 0.06, in 2017 it was 0.06, in 2016 it was 0.07, in 2015 the Total asset turnover
ratio was 0.07, in 2014 it was 7.6, in 2013 it was 0.07, in 2012 it was 0.07, 2011 the Total
assets turnover ratio was 0.06.

• Fixed Asset Turnover Ratio

It indicates the efficiency of fixed asset towards contribution to sales. It helps to assess
whether the investment in fixed assets is justified or not.

Fixed Asset Turnover Ratio = Net Sales

Fixed Assets

Year Net sales Fixed Asset Fixed Asset

Turnover Ratio
2020 2573235922 384392818 0.149381102
2019 2428686535 391975694 6.196013100
2018 2204993156 399922511 5.513550988
2017 1755182404 429189179 0.244526824
2016 1636853061 103892772 15.75521554
2015 1523970742 93291642 16.33555492
2014 1363508039 80021551 0.058687993
2013 1196570990 70050222 0.058542470
2012 1065214534 54665492 19.48605043
2011 813943638 47641893 17.08462000

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 STATE BANK OF INDIA

KLE Society’s Institute of Management Studies and Research, Hubli Page 67

 STATE BANK OF INDIA

Interpretation
It can be seen from the above chart that during the year 2020 is 0.14, in 2019 it was 6.19,in
2018 it was 5.51, in 2017 it was 0.24, in 2016 it was 15.75, in 2015 the Fixed asset turnover
ratio was 16.33 in 2014 it was 0.058, in 2013 it was 0.058, in 2012 it was 19.48, 2011 the
Fixed assets turnover ratio was 17.08 .

• Proprietary Ratio

It is also known as Net worth to total assets ratio or capital ratio. It establishes the
relationship between shareholders funds and total assets of business. Its main purpose is to
find out how much funds have been provided by shareholders for investment in assets of
business.

Proprietary Ratio = Shareholders funds/ Proprietors fund

Total Assets

Years Shareholders Total Assets Proprietary Ratio

Funds(capital +
Reserve)

2020 2320074275 39513939180 0.053104617

2019 2209138245 36809142489 0.060016020
2018 2191285603 34547519966 0.063428159
2017 1882860626 27059663041 0.069581820
2016 144274436 22590630328 0.006386472
2015 1284382265 20480797998 0.062711534
2014 1182822496 179223460 6.599707962
2013 988836854 15662610403 0.063133591
2012 839512058 13355192307 0.062860349
2011 649860432 12237362005 0.053104617

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KLE Society’s Institute of Management Studies and Research, Hubli Page 69

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Interpretation
It can be seen from the above chart that during the year 2020 is 0.05, in 2019 it was 0.06 in
2018 it was 0.06, in 2017 it was 0.06, in 2016 it was 0.00, in 2015 the Proprietary ratio was
0.06, in 2014 it was 6.59, in 2013 it was 0.06, in 2012 it was 0.06, 2011 the Proprietary ratio
was 0.05 .

• Fixed Assets to Proprietor’s Funds Ratio

This ratio establishes relationship between fixed assets and proprietor’s funds. The main
objectives of this ratio is to find out in what proportion owners funds are invested in fixed
assets

Fixed Assets to Proprietor’s Funds Ratio = Fixed Assets

Proprietor's Funds

Years Fixed Assets Proprietor’s Funds Fixed Assets to

Proprietor’s Fund
Ratio
2020 384392818 2320074275 0.165681255
2019 391975694 2209138245 0.177433754
2018 399922511 2191285603 0.182505881
2017 429189179 1882860626 0.227945272
2016 103892772 144274436 0.720105202
2015 93291642 1284382265 0.072635417
2014 80021551 1182822496 0.067653051
2013 70050222 988836854 0.070841030
2012 54665492 839512058 0.065115791
2011 47641893 649860432 0.073310961

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Interpretation
It can be seen from the above chart that during the year 2020 is 0.16, in 2019 it was 0.17, in
2018 it was 0.18, in 2017 it was 0.22, in 2016 it was 0.72, in 2015 the Fixed Assets
Proprietar's Fund ratio was 0.07, in 2014 it was 0.06, in 2013 it was 0.07, in 2012 it was
0.06, 2011 the Fixed Assets Proprietar's Fund ratio was 0.07.

• Current Assets to proprietor’s Funds Ratio

This ratio establishes relationship between current assets and proprietor’s funds. The main
objective of this ratio is to find out in what proportion proprietors fund has been invested
in current assets.

Current Assets to proprietor’s Funds Ratio = Current Assets

Proprietors funds

Years Current Assets Proprietors Funds Current Assets to

Proprietors Fund
Ratio
2020 2856398732 2320074275 1.231166934
2019 246968546 2209138245 0.111794065
2018 2095518119 2191285603 0.956296210
2017 1808766394 1882860626 0.960648052
2016 1802686164 144274436 12.49484117
2015 18422312469 1284382265 14.34332516
2014 1444301427 1182822496 1.221063542
2013 120251622 988836854 0.121609162
2012 1055020067 839512058 1.256706269
2011 1288209837 649860432 1.922869243

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Interpretation
It can be seen from the above chart that during the year 2020 is 1.23, in 2019 it was 0.11 in
2018 it was 0.95, in 2017 it was 0.96, in 2016 it was 12.49, in 2015 the Current Assets
Proprietar's Fund ratio was 14.34, in 2014 it was 1.22, in 2013 it was 0.12, in 2012 it was
1.25, 2011 the Current Assets Proprietar's Fund ratio was 1.92.

• Net Profit Ratio

The net profit ratio establishes the relationship between the net profit(after tax) of the firm
and net sales.
Net Profit Ratio = Net Profit *100
Net sales

Years Net Profit Net sales Net Profit Ratio

2020 144881106 2573235922 5.630307923
2019 8622298 2428686535 0.355018973
2018 65474537 2204993156 2.969375973
2017 104841026 1755182404 5.973226814
2016 99506537 1636853061 6.079136812
2015 131015720 1523970742 8.596997067
2014 108911717 1363508039 7.987610918
2013 141049849 1196570990 11.78783792
2012 117072886 1065214534 10.99054530
2011 82645190 813943638 10.15367479

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KLE Society’s Institute of Management Studies and Research, Hubli Page 75

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Interpretation
It can be seen from the above chart that during the year 2020 is 5.6, in 2019 it was 0.35, in
2018 it was 2.9, in 2017 it was 5.9, in 2016 it was 6.0, in 2015 the Net profit ratio was 8.5,
in 2014 it was 7.9, in 2013 it was 11.7, in 2012 it was 10.9, 2011 the Net profit ratio was
10.1.

• Debt-Equity Ratio
The debt equity ratio is another tool of financial analysis. The debt equity ratio reflects
the relative contribution of creditors and owners of business in the capital structure of the
firm. It is also called Internal – External Equity Ratio.

Debt & Equity Ratio = External Debt

Internal Debt

Years External Internal Debt Equity Ratio

Debt(Total Debt/shareholders
Liabilities) fund
2020 39513939180 2320074275 17.03132507
2019 36809142489 2209138245 16.66221768
2018 34547519966 2191285603 15.76586818
2017 27059663041 1882860626 14.37156986
2016 22590630328 144274436 15.65809644
2015 20480797998 1284382265 15.94602989
2014 17922345989 1182822496 15.15218559
2013 15662610403 988836854 15.83942825
2012 13355192307 839512058 15.90827931
2011 12237362005 649860432 18.83075411

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KLE Society’s Institute of Management Studies and Research, Hubli Page 77

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Interpretation
It can be seen from the above chart that during the year 2020 is 17.0, in 2019 it was 16.6, in
2018 it was 15.7, in 2017 it was 14.3, in 2016 it was 15.6, in 2015 the Debt Equity Ratio was
15.9, in 2014 it was 15.1, in 2013 it was 15.8, in 2012 it was 15.9, 2011 the Debt Equity
Ratio was 18.8 .

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FINDINGS

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 STATE BANK OF INDIA

• As per the study Current Ratio there is fluctuation from last 10 year and it was lowest in the
year 2013.

• As per the study using Quick Ratio there is fluctuation from last 10 year and it was highest
in the year 2020.

• The assets in 2013 were induced more when compared to remaining subsequent year which
resulted in fall in working capital Ratio.

• The company in the year 2020, 2019, and 2012 the firm has negative Net working capital
which indicate the company does not has sufficient amount of money to spend on its day to
day business operation but in the year 2011, 2013, 2014, 2015, 2016, 2017, 2018 the firm has
sufficient amount of money available to spend on its day to day business operation such has
paying short term bills and bank inventory.

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SUGGESTIONS

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• As the company's current Ratio had decreased maximum in the year 2012-2013 by 0.12 and
the company should try to improve the same in the future.

• As per the study using Quick Ratio there is a fluctuation from last 10 year.It was highest in
the year 2020.

• As in study there is a decrease in Net working Capital, the company should try to maintain
sufficient Net Working Capital.

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CONCLUSION

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 STATE BANK OF INDIA

The project undertaken at State Bank Of India was on the topic “A Study on Working Capital
Management”.

As per the project undertaken we can see that there are certain areas the
company has to focus more to improve its liquidity position. After analysis of the last 10
years data of the company and through studying the financial ratio it can be seen that the
company has some problems but is still in a better position.
Lastly I would say that I have tried my level best to study and suggest to the
best of my knowledge. I have given my sincere effort for completion of my project.

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ANNEXURE

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Blance Sheet as at 31st March 2018

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Profit and Loss Account for the year ended 31st March 2018

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Balance sheet as at 31st March 2019

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Profit and Loss Account for the year ended 31st March 2019

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 STATE BANK OF INDIA

Balance Sheet as at 31st March 2020

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Profit and Loss Account for the year ended 31st March 2020

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BIBLIOGRAPHY

WEBSITE:

http://www.bseindia.com/

http://www.moneycontrol.com/

http://www.sbi.co.in

PERIODICALS

Company Annual Reports -2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020.

KLE Society’s Institute of Management Studies and Research, Hubli Page 92