CHAPTER-I

INTRODUCTION OF FINANCIAL MANAGEMENT

1
 CHAPTER-I

INTRODUCTION AND DESIGN OF THE STUDY

INTRODUCTION

Businesses require financing to suit their economic needs. Any type of housing activity
is dependent on finances. As a result, it is known as the lifeblood of a commercial organisation.
Regardless of size, businesses require funding to carry out their operations.
In the modern world, all actions are focused with economic activities, particularly the
ability to profit from any initiative or activity. Profit generation is important to all corporate
activity. (According to the economic notion of elements of production, rent paid to the landlord.
A firm requires financing to cover all of its obligations, including wages paid to employees,
interest paid on capital, and profits paid to shareholders.

MEANING OF FINANCE:

Finance may be defined as the arts and science of managing of money. It includes
financial services and financial instruments Finance also is referred as the provision of
money at the time when it is needed Finance function is the procurement of funds and their
effective utilization in business concerns.
The concept of finance includes Capital, Funds, Money and Amounts. But each
word is having unique meaning; Studying and understanding the concept of finance become
an important part of the business concern.

DEFINITION OF FINANCE:

According to Oxford dictionary, the word finance connotes management of money

Webster's Ninth New Collegiate Dictionary defines finance as the Science in study of the
management of funds and the management of fund as the system that includes the
circulation of money, the rating of credit, the making of investments, and the provision of
banking facilities.

2
DEFINITION OF FINANCIAL MANAGEMENT:

Financial management is an integral part of overall management. It is concerned

with the duties of the financial managers in the business firm. The term financial
management has been defined by Solomon, "It is concerned with the efficient use of an
important economic resource namely, capital funds".
The most popular and acceptable definition of financial management as given by
S.C. Kuala is that "Financial Management deals with procurement of funds and their
effective utilization in the business.

SOURCES OF FINANCE:

To learn more about the industry, here are some of the most popular and helpful resources:

• Google Finance (market data stock prices, news, etc.)

• The SEC website (company filings)

• Bloomberg news (company and industry news)

SCOPE OF FINANCIAL MANAGEMENT:

Financial management is one of the important parts of overall management, which

is directly related with various functional departments like personnel, marketing and
production. Financial management covers wide area with multidimensional approaches. The
following are the important scope of financial management.

1. FINANCIAL MANAGEMENT AND ECONOMICS

Economic concepts like micro and macroeconomics are directly applied with the
financial management approaches. Investment decisions, micro and macro environmental
factors are closely associated with the functions of financial manager. Financial economics
is one of the emerging area, which provides immense opportunities to finance, and
economical areas.

3
2. FINANCIAL MANAGEMENT AND ACCOUNTING

Accounting records includes the financial information of the business concern.

Hence, we can easily understand the relationship between the financial management
accounting. In olden periods, both financial management and accounting are treated as a
same discipline and then it has been merged as Management Accounting because this part
is very much helpful to finance manager to take decisions.

3. FINANCIAL MANAGEMENT OR MATHEMATIC

Modem approaches of the financial management applied large number of

mathematical and statistical tools and techniques. They are also called as econometrics.
Economic order quantity, discount factor, time value of money, present value of money,cost
of capital, capital structure theories, dividend theories, ratio analysis and working capital
analysis are used as mathematical and statistical tools and techniques in the field of financial
management.

4. FINANCIAL MANAGEMENT AND PRODUCTION AND MANAGEMENT

Production management is the operational part of the business concern, which helps
to multiple the money into profit. Profit of the concern depends upon the production
performance. The financial manager must be aware of the operational process and finance
required for each process of production activities.

5. FINANCIAL MANAGEMENT AND MARKETING

Produced goods are sold in the market with innovative and modern approaches For
this, the marketing department needs finance to meet their requirements. The financial
manager or finance department is responsible to allocate the adequate finance to the
marketing department.

Hence, marketing and financial management are interrelated and depends on each other.

4
6. FINANCIAL MANAGEMENT AND HUMAN RESOURS

Financial management is also related with human resource department, which

provides manpower to all the functional areas of the management. Financial manager should
carefully evaluate the requirement of manpower to each department and allocate the finance
to the human resource department as wages, salary, remuneration, commission, bonus,
pension and other monetary benefits to the human resource department.

OBJECTIVES OF FINANCIAL MANAGEMENT

Effective procurement and efficient use of finance lead to proper utilization of the
finance by the business concern. It is the essential part of the financial manager. Hence, the
financial manager must determine the basic objectives of the financial management.
Objectives of Financial Management may be broadly divided into two parts such as
• Profit maximization
• Wealth maximization.

PROFIT MAXIMIZATION

Main aim of any kind of economic activity is earning profit. A business concern is
also functioning mainly for the purpose of earning profit. Profit is the measuring techniques
to understand the business efficiency of the concern. Profit maximization is also the
traditional and narrow approach, which aims at, maximizes the profit of the concern.
1. Profit maximization is also called as cashing per share maximization. It leads to
maximize the business operation for profit maximization.
2. Ultimate aim of the business concern is earning profit. Hence it considers all the possible
ways to increase the profitability of the concern.

3. Profit is the parameter of measuring the efficiency of the business concern. So it shows
the entire position of the business concern.

4. Profit maximization objectives help to reduce the risk of the business.

5
WEALTH MAXIMIZATION

Wealth maximization is one of the modern approaches, which involves latest

innovations and improvements in the field of the business concern. The term wealth means
shareholder wealth or the wealth of the persons those who are involved in the business
concern.
Wealth maximization is also known as value maximization or net present worth
maximization. This objective is a universally accepted concept in the field of business.

PROPER RESOURCING:

Collection of finance is an important objective of financial management. After

forecasting the financial requirements, the finance manager must decide where the finance
cash will be sourced.

✓ They can collect finance from many sources such as shares, debentures, bank loans, etc.
✓ There must be a proper balance between owned finance and borrowed finance. The
company must borrow money at as low a rate of interest as achievable.

PROCESS OF FINANCIAL MANAGEMENT:

(1) Financial Planning

Management need to ensure that enough funding is available at the right time to
meet the needs of the business. In the short term, funding may be needed to invest in
equipment and stocks, pay employees and fund sales made on credit. In the medium and
long term, funding may be required for significant additions to the productive capacity of
the business or to make acquisitions. This links in with the financial decision making
process and forecasting
(2) Financial Control
Financial control is a critically important activity to help the business ensure that the
business is meeting its objectives. Financial control addresses questions such as:

• Are assets being used efficiently?

• Are the businesses assets secure?

• Do management act in the best interest of shareholders and in accordance with business rules?
6
 The key aspects of financial decision-making relate to investment, financing and
dividends:
Investments must be financed in some way - however there are always financing
alternatives that can be considered. For example it is possible to raise finance from selling
new
shares, borrowing from banks or taking credit from suppliers. This is connected with the capital
budget and forecasting when dealing with fixed assets and projects.

Financial options - this is connected to the raising of finance from various sources like
banks or financial investors, which will depend on the options of the type of source, period
of financing, cost of financing and the net present returns generated.

A key financing decision is whether profits earned by the business should be retained
rather than distributed to shareholders via dividends. If dividends are too high, the business
may be starved of funding to reinvest in growing revenues and profits further.

All these areas of financial management apply to your personal life and family life,
how family's finances are managed are all related to financial management.

FUNCTION OF FINANCIAL MANAGEMENT:

Financial management has a wide scope. According to Dr. S.C. Saxon, the scope of
financial management includes the following five 'A's.
1. Anticipation:
Financial management estimates the financial needs of the company. That is, it finds out how
much finance is required by the company.
2. Acquisition:
It collects finance for the company from different sources.
3. Allocation:
It uses this collected finance to purchase fixed and current assets for the company.
4. Appropriation:
It divides the company's profits among the shareholders, debenture holders,
etc. It keeps a part of the profits as reserves.

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5. Assessment:
It also controls all the financial activities of the company. Financial management is the most
important functional area of management.

TYPES OF FINANCIAL MANAGEMENT:

A great financial report of any organization mostly depends on how various types
of financial management decisions are undertaken. It is wisely said that a well financial
managed company will always have a solid balance sheets and great books of accounts
which you might like to revisit it multiple times.

CAPITAL BUDGET MANAGEMENT:

Capital budgeting is the planning procedure used to decide if a company's fixed

assets, for example, new plant, new machinery, new research projects are worth of
allocating funds through the organization capitalization structure (equity, debt or profit
earnings). Numerous formal strategies are utilized in capital budgeting. For example:
Profitability index, Payback period, Net present value, Real options valuation, accounting
rate of return, internal rate of return, Equivalent annual cost and more.

CAPITAL STRUCTIURE MANAGEMENT:

In corporate finance, capital structure is the manner in which a company finances

through a mix of dept. or equity securities. Debt financing comes as bond issue, while equity
comes from retained earnings or as a stock. Short-term debt financing, for example, working
capital necessities is likewise viewed as a major aspect of the capital structure. Here
financial management team is responsible for capital structure of a company's short-term
debts, longterm debts, equities, preferred stocks and more. At the point when team.

WORKING CAPITAL MANAGEMENT:

Working capital management of an organization refers to managing book keeping

methodology and accounting strategies intended to keep track of current assets, Current
liabilities, cash flow, inventory turnover ratio, working capital ratio and much more.

8
 CHAPTER-II

PROFILE OF THE COMPANY

9
 CHAPTER-II

PROFILE OF THE KARNATAKA GRAMINA BANK

Karnataka Gramin Bank, headquartered in Ballari under the sponsorship of Canara

Bank, was established on April 1, 2019. Pragathi Krishna Gramin Bank, also sponsored by
Canara Bank with its headquarters in Ballari, and Kaveri Gramin Bank, sponsored by State
Bank of India with its headquarters in Mysuru, are affiliated banks.

The description of the nature of business is a structured method outlining the type of
business and its activities. It serves as a synthesis of the business's focus, emphasizing the
problems it addresses and everything it undertakes to achieve its goals.

The bank offers free SMS alerts for all transactions, requiring customers to provide a
mobile phone number for activation. Additionally, the bank has a reward program in
collaboration with a loyalty rewards program, providing points for purchases above Rs 100.
Each reward point is valued at Rs 0.25. A dedicated website, www.karnatakagraminbank.com,
facilitates the registration, viewing, and redemption of accumulated reward points under the
'Maxgetmore' Program.

The bank ensures zero lost card liability. In the event of a lost or mutilated credit card,
it is replaced free of cost, provided the cardholder reports the loss to the bank in writing. The
cardholder is responsible for charges incurred on the card before reporting its loss.

10
Industry Profile:

A bank, a financial institution offering various services, serves as a business providing

fundamental banking services like deposit acceptance and loan disbursement. Non-banking
institutions also offer some banking services. The Indian banking system, a vital component of
the financial services sector, must adapt to technological advancements and other influences.

The organized banking industry operates within the financial system, offering services
such as lending, deposit collection, and various customer services. Banks have evolved to
provide a range of alternatives, including credit, lending, and payment services. Despite
changes and collaborations in the finance sector, banks continue their primary role of receiving
deposits and disbursing funds.

Banking is an integral part of daily life, touching various aspects of work, business,
home, school, and travel. The banking system has evolved from simple transactions to complex
global commerce. Banks, acting as intermediaries, facilitate smooth transactions, track money,
make payments, and collect profits.

Former Bank of England director Josiah Stamp commented on the financial system's
transformative nature, emphasizing the manufacturing of money. The banking sector has
undergone innovation and diversification, expanding into industries like mutual funds, leasing,
factoring, credit cards, and merchant banking.

The well-developed banking system comprises various classes of banks, including the
RBI as the system's fountainhead, public sector banks, private sector banks (old and new
generation), foreign banks, and regional banks and co-operative banks.

Significance of Logo:

The logo signifies prosperity with leaves representing agriculture and a clear
environment. Diverging leaves symbolize the bank's expanding base and growing support for
agriculture. The circle formed represents wholeness and inclusive growth. Blue color
represents trust, loyalty, integrity, and responsibility, while yellow signifies optimism, success,
confidence, youthfulness, and fresh energy.

Motto:

"Vishwasada Pratheeka" - Symbol for

11
 Logo of Karnataka Gramin Bank

Objectives:

• Provide banking facilities to underprivileged individuals.

• Eradicate exploitation by money lenders.
• Generate small enterprise opportunities for the unemployed.
• Inculcate a comprehensible and operable organizational format for disadvantaged
individuals, offering social, political, and economic strength through mutual
support.
• Reverse the traditional cycle of 'low income, low savings, low investment, low
income' to establish an expanding system of 'low income, credit, increased income,
more credit, heightened investment, and further income.'

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 CHAPTER-III

RATIO ANALYSIS AND INTERPRETATION

13
 CHAPTER-IV

RATIO ANALYSIS AND INTERPRETATION

MEANING OF RATIO ANALYSIS
Ratio analysis is a quantitative method of gaining insight into a company’s liquidity,
operational efficiency, and profitability by studying its financial statements such as the balance
sheet and income statement. Ratio analysis is a cornerstone of fundamental equity analysis.
OBJECTIVES OF RATIO ANALYSIS
1. Simplify accounting information.
2. Determine liquidity or Short-term solvency and Long-term solvency. Short-term
solvency is the ability of the enterprise to meet its short-term financial obligations.
Whereas, Long-term solvency is the ability of the enterprise to pay its long-term
liabilities of the business.
3. Assess the operating efficiency of the business.
4. Analyse the profitability of the business.

5. Help in comparative analysis, i.e. inter-firm and intra-firm comparisons.

ADVANTAGES OF RATIO ANLAYSIS

• Useful tools for analysis for Financial Statements
• Simplifies accounting data
• Helpful in assessing the operating efficiency of business
• Useful for forecasting
• Useful in locating the weak areas
• Useful in inter-firm and intra-firm comparison
LIMITATIONS OF RATIO ANALYSIS
• False result
• Ignores Qualitative factors
• Lack of standard ratio
• May not be comparable
• Price level changes are not considered
• Window dressing

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TYPES OF RATIO ANALYSIS
The various kinds of financial ratios available may be broadly grouped into the
following six silos, based on the sets of data they provide:
1. Liquidity Ratios
Liquidity ratios measure a company's ability to pay off its short-term debts as they
become due, using the company's current or quick assets. Liquidity ratios include the current
ratio, quick ratio, and working capital ratio.
2. Solvency Ratios
Also called financial leverage ratios, solvency ratios compare a company's debt levels
with its assets, equity, and earnings, to evaluate the likelihood of a company staying afloat over
the long haul, by paying off its long-term debt as well as the interest on its debt. Examples of
solvency ratios include: debt-equity ratios, debt-assets ratios, and interest coverage ratios.
3. Profitability Ratios
These ratios convey how well a company can generate profits from its operations. Profit
margin, return on assets, return on equity, return on capital employed, and gross margin ratios
are all examples of profitability ratios.
4. Efficiency Ratios
Also called activity ratios, efficiency ratios evaluate how efficiently a company uses its
assets and liabilities to generate sales and maximize profits. Key efficiency ratios include:
turnover ratio, inventory turnover, and days' sales in inventory.
5. Coverage Ratios
Coverage ratios measure a company's ability to make the interest payments and other
obligations associated with its debts. Examples include the times interest earned ratio and
the debt-service coverage ratio.
6. Market Prospect Ratios
These are the most commonly used ratios in fundamental analysis. They
include dividend yield, P/E ratio, earnings per share (EPS), and dividend payout ratio.
Investors use these metrics to predict earnings and future performance.

15
3.1 Current ratio:

If a corporation has enough resources to meet its short-term obligations, it can do so by

using a liquidity ratio called the current ratio. Following is a comparison of a company's current
assets and liabilities.
= CURRENT ASSETS / CURRENT LIABILITY

year Current assets Current liability Current ratio

2022 269309599 368643374 0.73
2023 75038345 101306608 0.74
Current ratio
0.025

0.02

0.015

0.01

0.005

0
Proprietary ratio

2022 2023

Interpretation:
In 2020, current assets were modest, but in 2023 and 2021, they increased by 0.23
times the amount of current liabilities. That ratio was greater at the end of 2021 and 2023
than it was at the end of 2020, showing a slight improvement in the present ratio.

16
3.2 Quick ratio:

The quick ratio, commonly referred to as the acid-test ratio, assesses a company's
capacity to promptly settle or retire its current liabilities using its readily available cash or
fast assets.
It is defined as the ratio of current liabilities to liquid or easily transferrable assets.
Supposedly current, quick assets can be quickly converted to cash at a price close to their
worth.
= QA/CL

Year Quick assets Current liability Quick ratio

2022 384468108 400111866 0.80
2023 104978662 109889999 0.95

Quick ratio
0.025

0.023
0.02

0.015

0.01

0.005
0.002
0
Proprietary ratio

2022 2023

Interpretation:

The firm maintains the right ratio, so even though the company's liquid position
changes from year to year, it is still good. The maximum liquid ratio (0.96) and lowest liquid
ratio (0.22) were in the years 2020–21 and 2022, respectively (0.81).

17
3.3 Total asset turnover ratio

By comparing the company's net sales to its total assets, the asset turnover ratio
assesses a company's capacity to generate revenue from its assets. It is determined by dividing
net revenues by the typical company's total assets. In other words, it seeks to ascertain the
volume of sales generated by each rupee of average assets by analyzing sales as a percentage
of average assets.
= NS/TA

Table: 5.7 Asset turnover ratio

year Net sales Total asset TATR

2022 468103418 400111866 1.1
2023 440394867 429569885 1.0

Total asset turnover ratio

0.025

0.023
0.02

0.015

0.01

0.005
0.002
0
Proprietary ratio

2022 2023

Interpretation:

The company's asset turnover ratio is subpar. The company must turn its assets over
more often. The Karnataka Gramin Bank had the highest stock turnover ratio in the year 2020
& 2022 is 1.1, while the lowest stock turnover ratio of the sector was recorded in the years
2021 & 2023 is 1.If the asset turnover ratio is more then and equal to 1, it is good for the
business, and if it is greater than 1, that is always excellent for the business.

18
 3.4 Return on assets ratio
A financial ratio known as return on assets (ROA) measures a company's success in
relation to its total assets. Investors, analysts, and corporate management can use ROA to
judge how effectively a company uses its resources to turn a profit. The metric is typically
expressed as a percentage using the net income and average assets of a corporation. A
company that manages its balance sheet more effectively and efficiently to generate profits
will have a higher ROA, whereas one with a lower ROA will need to make improvements.
A measure of a company's profitability in relation to its total assets is called return on
assets. Management, analysts, and investors can use ROA to assess how effectively a
company uses its resources to make a profit.
= NP/ TA

year Net profits Total assets Return on assets

ratio
2022 474676 400111866 0.0011
2023 75595 429569885 0.0001

Return on assets ratio

0.025

0.023
0.02

0.015

0.01

0.005
0.002
0
Proprietary ratio

2022 2023

Interpretation:
The higher the return on assets ratio, the better the company is performing since
higher ratio imply that the company is generating less revenue but here at the year 2022 the ratio
will be 0.0011 and in the year 2020 was 0.0005 and 2021was 0.0003,2023 was 0.0001 ratio is
varying year by year.

19
3.5 Net profit ratio
The net profit ratio, sometimes referred to as the net profit margin ratio, measures the
amount of revenue received by the business in relation to its earnings. In other words, the net
profit margin ratio demonstrates the relationship between a company's net profit after taxes
and net sales. .
(Net Profit / Net Sales) x 100 = Net Profit Ratio.

year Net profit Net sales Net profit ratio

2022 474676 468103418 0.101
2023 75595 440394867 0.017

Net profit ratio

0.025

0.023
0.02

0.015

0.01

0.005
0.002
0
Proprietary ratio

2022 2023

Interpretation:
The company asset turnover ratio is not good. The company should improve the net
profit ratio the highest net profit ratio of Karnataka Gramin bank is recorded in the year
2022which was 0.101 and lowest stock turnover ratio of industry is recorded in the year 2023
which was 0.017.

20
 3.6 Debt-to-equity ratio

The debt-to-equity ratio, also known as the debt-equity ratio, is a financial metric
used to assess a company's utilization of financial leverage. This ratio takes into account both
the equity held by shareholders and the company's obligations, providing insights into the
company's capital structure.Expressed as a ratio, the debt-to-equity ratio is calculated by
dividing the company's total liabilities by its shareholders' equity.

Debt-to-equity ratio = total liabilities / total shareholder’s equity

year Total liabilities Total shareholder’s Debt-to-equity

equity ratio
2022 400111866 18894321 21.17
2023 429569885 63377839 6.77

Debt-to-equity ratio
0.025

0.023
0.02

0.015

0.01

0.005
0.002
0
Proprietary ratio

2022 2023

Interpretation:
The company's debt-to-equity ratio was 21.17 in 2023, the highest year on record, and
6.77 in 2019, the lowest year on record. The debt-to-equity ratio varies from year to year. A
business should raise its equity.

21
3.7 Return on capital employed ratio
The financial indicator known as "return on capital employed," or ROCE, is used to
evaluate a company's capacity to produce profits by utilizing its capital structure. In other
words, ROCE is a measurement of how effectively and efficiently a business is able to turn
each dollar of capital into net operating profit.

year EBIT Capital employed Return on capital

employed ratio
2022 366603.55 19390.35 18.95
2023 372406.31 32195.26 11.56

Graph:7

RETURN ON CAPITAL EMPLOYED

RATIO
2022 2023
18.95

11.56

RETURN ON CAPITAL EMPLOYED RATIO

Interpretation:

The company asset turnover ratio is not good. The company should improve the return
on equity ratio the highest return on capital employed ratio of Karnataka Gramin bank is
recorded in the year 2022 which was 18.95 and lowest return on capital employed ratio of
industry is recorded in the year 2021 which was 10.39.

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3.8 Return on equity ratio

The rate of return on investment for holders of common stock in a firm is precisely
calculated using the return on equity ratio. A company's ability to generate returns on the
investments made by its owners is measured by its return on equity.
The rate of return on investment for holders of common stock in a firm is precisely calculated
using the return on equity ratio. A company's ability to generate returns on the investments
made by its owners is measured by its return on equity.

Profit after Tax (PAT) / Shareholders' Fund * 100 equals the return on equity ratio.

Year Profit after tax (PAT) Shareholders ’fund Return on equity

ratio
2022 474676 9931.20 47.79
2023 75595.0 18785.72 4.02

Return on equity ratio

0.025

0.023
0.02

0.015

0.01

0.005
0.002
0
Proprietary ratio

2022 2023

Interpretation:

The year 2022 saw the company's return on equity ratio reach a peak of 47.79, while
the year 2023 saw the company's return on equity ratio fall to 4.02. The debt-to-equity ratio
varies from year to year. A business should raise its equity.

23
3.9 Earnings yield ratio:

The earnings yield is derived by dividing the share's current market price by the
earnings per share for the most recent 12-month period. The earnings yield, which is the
inverse of the P/E ratio, shows how much an organization's earnings are allocated to each
share of its stock. Earnings yield is used by investors to spot assets that seem to be
undervalued or overvalued, and by many investment managers to determine the best asset
allocations. Earnings yield = EPS / stock price

year EPS Stock price Earnings yield ratio

2022 78.00 1483.39 0.05
2023 46.00 400.66 0.12

Earnings yield ratio

0.025

0.023
0.02

0.015

0.01

0.005
0.002
0
Proprietary ratio

2022 2023

Interpretation:

The highest earning yield ratio of the company is recorded in the year 2021 which
was 0.14 and lowest earning yield ratio of the company is recorded in the year 2022 which
was 0.05 The debt equity ratio is fluctuating year by year. A company should increase the
firm's equity

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3.10 Proprietary ratio

A proprietary ratio can be used to determine whether a company's capital structure is

stable as well as to show that a company builds its assets through the issuance of a significant
number of equity shares as opposed to borrowing money from external sources.
In the event of liquidation, it also specifies how much will be paid to stockholders.

Proprietary ratio = proprietors fund / total assets

year Proprietors fund Total assets Proprietary ratio

2022 1182921 400111866 0.002
2023 9931230 429569885 0.023

Proprietary ratio
0.025

0.023
0.02

0.015

0.01

0.005
0.002
0
Proprietary ratio

2022 2023

Interpretation:

The proprietary ratio for the company is poor. The business has to raise its return on
equity ratio. The year 2023 saw the highest return on proprietary ratio of Karnataka Gramin
Bank, which was 0.023, and the lowest return on proprietary ratio of the industry, which was
0.002.

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 CHAPTER-IV

BALANCE SHEET

26
 CHAPTER-IV
BALANCE SHEET
KARNATAKA GRAMIN BANK
HEAD OFFICE : BALLARI BALANCE SHEET AS AT 31.03.2023

Schedule
Particulars
No.
31.03.2023 31.03.2022

LIABILITIES

Capital 1 1176382 1176382

Reserves 2 20083591 20007996

Deposits 3 339051505 317879104

Borrowings 4 55000999 50764639

Other Liabilities and Provisions 5 14257408 10283745

TOTAL 429569885 400111866

ASSETS

Cash & Balances with RBI 6 18465309 13492136

Balance with Banks and Money at Call and

7 22883256 19303644
Short Notice

Investments 8 119277712 130802267

Advances (Net) 9 257312729 226440774

Fixed Assets 10 1030382 957870

Other Assets 11 10600497 9115175

TOTAL 429569885 400111866

Contingent Liabilities 12 2731580 2231796

Bills for Collection 318184 384651

Significant Accounting Policies 17

Appended
Notes on Accounts 18

27
 CHAPTER-V

FINDINGS AND CONCLUSION

28
FINDINGS

• It is found the current ratio value is 0.74%

• It is found the quick ratio value is 0.95%
• It is found the total asset turnover ratio is 1.1%
• It is found the return on assets ratio value is 0.0011%
• It is found the net profit ratio value is 0.0101%
• It is found the debt-to-equity ratio value is 21.17%
• It is found the return on capital employed ratio value is 18.95%
• It is found the return on equity ratio value is 47.79%
• It is found the earnings yield ratio value is 0.1%
• It is found the proprietary ratio value is 0.023%

CONCLUSION
In this study on financial performance of KARNATAKA GRAMIN BANK I conclude that the
bank was able to earn profit during the study period. Hence the same level of operations can
be continued. The bank was able to maintain adequate working capital during the study period.
Hence the same level of operation can be continued. The management of the bank has to
concentrate the shareholder’s funds either by issuing more shares (or) by increasing reserve
funds.

29
 BIBLIOGRAPHY

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30
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