Project Report on SBI

A

Summer Training Report

On

ORGANISATIONAL STUDY AND FINANCIAL ANALYSIS

AT

STATE BANK OF INDIA

Submitted By

SHWETA AGRAWAL

MBA F.T. Course semester IIIBatch-2011-13

Submitted To:

Prof. ARCHANA TIWARI

VNS INSTITUTE OF MANAGEMENT

BARKATULLAH VISHWAVIDYALAYA,

Year-2011-13

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DECLARATION

I hereby declare that my Summer Training Report entitled

“ORGANISATIONAL STUDY AND FINANCIAL ANALYSIS” is an authentic

work done by me as part of my study at (STATE BANK OF INDIA).

The Project was undertaken as a part of the course curriculum of

MBA Full Time Programme of Barkatullah University , Bhopal. This has not

been submitted to any other examination body earlier.

Date: _________ Signature -

Name: Shweta Agrawal MBA (Full Time) III Sem VNS Institute of Management

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ACKNOWLEDGEMENT

I sincerely acknowledge with a deep heartfelt gratitude to my Project In charge PROF. ARCHANA TIWARI for her valuable and faithful guidance, encouragement & suggestions throughout the completion of the Project work.

I would like to extend my sincere thanks to PROF. (Dr) P.K. CHOPRA, Director VNS Institute of Management Bhopal (M.P.) for his continuous support and guidance.

Last but not the least gratitude to all those who extended their guidance directly or indirectly in completion of this Project work.

SHWETA AGRAWALM.B.A (FULL TIME)

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TABLE OF CONTENTS

4

Sr. No. CHAPTERS PAGE No.

1 INTRODUCTION 5

INTRODUCTION TO TOPIC 5-32

OBJECTIVES 33

RESEARCH METHODOLOGY 34-41

LIMITATIONS 42

2 ORGANISATIONAL /COMPANY PROFILE 43-54

3 DATA ANALYSIS AND INTERPRETATION 55-63

4 OBSERVATION AND FINDINGS 64-65

5 CONCLUSIONS 66-67

6 RECOMMENDATIONS 68-70

7 BIBLIOGRAPHY 71-73

8 ANNEXURE 74-83

INTRODUCTION TOINTRODUCTION TO STATE BANK OF INDIASTATE BANK OF INDIA

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INTRODUCTION TO STATE BANK OF INDIA

The origin of the State Bank of India goes back to the first decade of the nineteenth century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. Three years later the bank received its charter and was re-designed as the Bank of Bengal (2 January 1809). A unique institution, it was the first joint-stock bank of British India sponsored by the Government of Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July 1843) followed the Bank of Bengal. These three banks remained at the apex of modern banking in India till their amalgamation as the Imperial Bank of India on 27 January 1921.

Primarily Anglo-Indian creations, the three presidency banks came into existence either as a result of the compulsions of imperial finance or by the felt needs of local European commerce and were not imposed from outside in an arbitrary manner to modernise India's economy. Their evolution was, however, shaped by ideas culled from similar developments in Europe and England, and was influenced by changes occurring in the structure of both the local trading environment and those in the relations of the Indian economy to the economy of Europe and the global economic framework.

Bank of Bengal H.O.

Establishment

The establishment of the Bank of Bengal marked the advent of limited liability, joint-stock banking in India. So was the associated innovation in banking, viz. the decision to allow the Bank of Bengal to issue notes, which would be accepted for payment of public revenues within a restricted

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geographical area. This right of note issue was very valuable not only for the Bank of Bengal but also its two siblings, the Banks of Bombay and Madras. It meant an accretion to the capital of the banks, a capital on which the proprietors did not have to pay any interest. The concept of deposit banking was also an innovation because the practice of accepting money for safekeeping (and in some cases, even investment on behalf of the clients) by the indigenous bankers had not spread as a general habit in most parts of India. But, for a long time, and especially upto the time that the three presidency banks had a right of note issue, bank notes and government balances made up the bulk of the investible resources of the banks.

The three banks were governed by royal charters, which were revised from time to time. Each charter provided for a share capital, four-fifth of which were privately subscribed and the rest owned by the provincial government. The members of the board of directors, which managed the affairs of each bank, were mostly proprietary directors representing the large European managing agency houses in India. The rest were government nominees, invariably civil servants, one of whom was elected as the president of the board.

BusinessThe business of the banks was initially confined to discounting of bills of exchange or other negotiable private securities, keeping cash accounts and receiving deposits and issuing and circulating cash notes. Loans were restricted to Rs.one lakh and the period of accommodation confined to three months only. The security for such loans was public securities, commonly called Company's Paper, bullion, treasure, plate, jewels, or goods 'not of a perishable nature' and no interest could be charged beyond a rate of twelve per cent. Loans against goods like opium, indigo, salt woolens, cotton, cotton piece goods, mule twist and silk goods were also granted but such finance by way of cash credits gained momentum only from the third decade of the nineteenth century. All commodities, including tea, sugar and jute, which began to be financed later, were either pledged or hypothecated to the bank. Demand promissory notes were signed by the

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borrower in favour of the guarantor, which was in turn endorsed to the bank. Lending against shares of the banks or on the mortgage of houses, land or other real property was, however, forbidden.

Indians were the principal borrowers against deposit of Company's paper, while the business of discounts on private as well as salary bills was almost the exclusive monopoly of individuals Europeans and their partnership firms. But the main function of the three banks, as far as the government was concerned, was to help the latter raise loans from time to time and also provide a degree of stability to the prices of government securities.

Major change in the conditions

A major change in the conditions of operation of the Banks of Bengal, Bombay and Madras occurred after 1860. With the passing of the Paper Currency Act of 1861, the right of note issue of the presidency banks was abolished and the Government of India assumed from 1 March 1862 the sole power of issuing paper currency within British India. The task of management and circulation of the new currency notes was conferred on the presidency banks and the Government undertook to transfer the Treasury balances to the banks at places where the banks would open branches. None of the three banks had till then any branches (except the sole attempt and that too a short-lived one by the Bank of Bengal at Mirzapore in 1839) although the charters had given them such authority. But as soon as the three presidency bands were assured of the free use of government Treasury balances at places where they would open branches, they embarked on branch expansion at a rapid pace. By 1876, the branches, agencies and sub agencies of the three presidency banks covered most of the major parts and many of the inland trade centres in India. While the Bank of Bengal had eighteen branches including its head office, seasonal branches and sub agencies, the Banks of Bombay and Madras had fifteen each.

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Presidency Banks Act

The presidency Banks Act, which came into operation on 1 May 1876,

brought the three presidency banks under a common statute with similar

restrictions on business. The proprietary connection of the Government

was, however, terminated, though the banks continued to hold charge of

the public debt offices in the three presidency towns, and the custody of a

part of the government balances. The Act also stipulated the creation of

Reserve Treasuries at Calcutta, Bombay and Madras into which sums above

the specified minimum balances promised to the presidency banks at only

their head offices were to be lodged. The Government could lend to the

presidency banks from such Reserve Treasuries but the latter could look

upon them more as a favour than as a right.

The decision of the Government to keep the surplus balances in Reserve Treasuries outside the normal control of the presidency banks and the connected decision not to guarantee minimum government balances at new places where branches were to be opened effectively checked the growth of new branches after 1876. The pace of expansion witnessed in the previous decade fell sharply although, in the case of the Bank of Madras, it continued on a modest scale as the profits of that bank were mainly derived from trade dispersed among a number of port towns and inland centres of the presidency.

India witnessed rapid commercialisation in the last quarter of the nineteenth century as its railway network expanded to cover all the major regions of the country. New irrigation networks in Madras, Punjab and Sind accelerated the process of conversion of subsistence crops into cash crops, a portion of which found its way into the foreign markets. Tea and coffee plantations transformed large areas of the eastern Terais, the hills of Assam

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and the Nilgiris into regions of estate agriculture par excellence. All these resulted in the expansion of India's international trade more than six-fold. The three presidency banks were both beneficiaries and promoters of this commercialisation process as they became involved in the financing of practically every trading, manufacturing and mining activity in the sub-continent. While the Banks of Bengal and Bombay were engaged in the financing of large modern manufacturing industries, the Bank of Madras went into the financing of large modern manufacturing industries, the Bank of Madras went into the financing of small-scale industries in a way which had no parallel elsewhere. But the three banks were rigorously excluded from any business involving foreign exchange. Not only was such business considered risky for these banks, which held government deposits, it was also feared that these banks enjoying government patronage would offer unfair competition to the exchange banks which had by then arrived in India. This exclusion continued till the creation of the Reserve Bank of India in 1935.

Presidency Banks of Bengal

The presidency Banks of Bengal, Bombay and Madras with their 70 branches were merged in 1921 to form the Imperial Bank of India. The triad had been transformed into a monolith and a giant among Indian commercial banks had emerged. The new bank took on the triple role of a commercial bank, a banker's bank and a banker to the government.

But this creation was preceded by years of deliberations on the need for a 'State Bank of India'. What eventually emerged was a 'half-way house' combining the functions of a commercial bank and a quasi-central bank.

The establishment of the Reserve Bank of India as the central bank of the country in 1935 ended the quasi-central banking role of the Imperial Bank. The latter ceased to be bankers to the Government of India and instead became agent of the Reserve Bank for the transaction of government business at centres at which the central bank was not established. But it continued to maintain currency chests and small coin depots and operate the remittance facilities scheme for other banks and the public on terms

10

stipulated by the Reserve Bank. It also acted as a bankers' bank by holding their surplus cash and granting them advances against authorized securities. The management of the bank clearing houses also continued with it at many places where the Reserve Bank did not have offices. The bank was also the biggest tendered at the Treasury bill auctions conducted by the Reserve Bank on behalf of the Government.

The establishment of the Reserve Bank simultaneously saw important amendments being made to the constitution of the Imperial Bank converting it into a purely commercial bank. The earlier restrictions on its business were removed and the bank was permitted to undertake foreign exchange business and executor and trustee business for the first time.

Imperial Bank

The Imperial Bank during the three and a half decades of its existence recorded an impressive growth in terms of offices, reserves, deposits, investments and advances, the increases in some cases amounting to more than six-fold. The financial status and security inherited from its forerunners no doubt provided a firm and durable platform. But the lofty traditions of banking which the Imperial Bank consistently maintained and the high standard of integrity it observed in its operations inspired confidence in its depositors that no other bank in India could perhaps then equal. All these enabled the Imperial Bank to acquire a pre-eminent position in the Indian banking industry and also secure a vital place in the country's economic life. When India attained freedom, the Imperial Bank had a capital base (including reserves) of Rs.11.85 crores, deposits and advances of Rs.275.14 crores and Rs.72.94 crores respectively and a network of 172 branches and more than 200 sub offices extending all over the country.

First Five Year Plan

In 1951, when the First Five Year Plan was launched, the development of rural India was given the highest priority. The commercial banks of the country including the Imperial Bank of India had till then confined their operations to the urban sector and were not equipped to respond to the

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emergent needs of economic regeneration of the rural areas. In order, therefore, to serve the economy in general and the rural sector in particular, the All India Rural Credit Survey Committee recommended the creation of a state-partnered and state-sponsored bank by taking over the Imperial Bank of India, and integrating with it, the former state-owned or state-associate banks. An act was accordingly passed in Parliament in May 1955 and the State Bank of India was constituted on 1 July 1955. More than a quarter of the resources of the Indian banking system thus passed under the direct control of the State. Later, the State Bank of India (Subsidiary Banks) Act was passed in 1959, enabling the State Bank of India to take over eight former State-associated banks as its subsidiaries (later named Associates).

The State Bank of India was thus born with a new sense of social purpose aided by the 480 offices comprising branches, sub offices and three Local Head Offices inherited from the Imperial Bank. The concept of banking as mere repositories of the community's savings and lenders to creditworthy parties was soon to give way to the concept of purposeful banking sub serving the growing and diversified financial needs of planned economic development. The State Bank of India was destined to act as the pacesetter in this respect and lead the Indian banking system into the exciting field of national development.

STATE BANK OF INDIA

Old name : Bank of Calcutta (1809), Bank of Bengal (1809) and Imperial Bank of India (1921)

Estd. In Year : 1806

Founder : Bengal Government

Nationalization : 1955

Head Office : Mumbai (Maharashtra)

Share Capital : 59.73 percent (RBI)

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Capital : Rs. 4812 Crores

SBI ASSOCIATES STATE BANK OF BIKANER AND JAIPUR

Old Name : The Govind Bank Private Limited


Head Office : Jaipur ( Rajasthan)

Share Capital : 75 percent(SBI)

STATE BANK OF HYDERABAD

Old Name : Hyderabad

Estd. in Year : 1941


Head Office : Hyderabad (Andhra Pradesh)

Share Capital : 100 percent (SBI)

STATE BANK OF INDORE

Old Name: Bank of Indore Ltd.


Head Office : Indore (Madhya Pradesh)

Share Capital : 98.05 percent (SBI)

STATE BANK OF PATIALA

Old Name : Patiala State Bank


Founder : Maharaja Bhupinder Singh


Head Office : Patiala (Punjab)

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STATE BANK OF SAURASTRA

Old Name : Saurastra state Bank



Head Office : Bhavnagar (Gujarat)


STATE BANK OF MYSORE

Old Name: Bank of Mysore Ltd.


Founder : M. Visheshwaraiya


Head Office : Bangalore (Karnataka)

Share Capital : 92.33 percent (SBI)

STATE BANK OF TRAVANCORE

Old Name: Travancore Bank Ltd.



Head Office : Trivandrum (Kerala)


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TOPIC & WORKING INTOPIC & WORKING IN STATE BANK OF INDIASTATE BANK OF INDIA

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TOPIC AND WORKING IN STATE BANK OF INDIA

LIST OF PRODUCTS:-

Branch Code 4823

Branch Name GOVINDPURA

PRODUCTS/SERVICES OFFERED

Personal Banking

Current Accounts

Savings Bank

Savings Plus

Term Deposits

Reinvestment Plan

Multi Option Deposits

Recurring Deposits

Public Provident Fund Scheme

Housing Loans

Car Loans

Education Loans

Consumer Durables Loans

Personal Loans

Property Loans

Loans to Pensioners

Loans against Shares And Debentures

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Gold Loans

Demand Loans on Term Deposits

Demand Loans against Govt. Securities

NRI Banking

Non Resident External Rupee Accounts (NRE)

Ordinary Non Resident Rupee Accounts (NRO)

Non Resident Special Rupee Accounts

Corporate Banking

Cash Credits

Medium Term Loans

Small Scale Industries

Liberalised Scheme

Entrepreneur Scheme

Equity Fund Scheme

Small Business Finance

Retail Trade

Professionals and Self Employed

Business Enterprises

Transport Operators

Government Business

CBDT

Special Deposit Scheme

Posts

Central Civil Pensions

Defense Pensions

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Telecom Pensions

State Govt. Pensions

Other Services

Safe Deposit Lockers

Safe Custody

Rupee Travellers Cheques

Gift Cheques

ATM Services

ATM Services

ATM Services

Demat Services

Demat Services

Demat Services

Other Services

Internet Banking

Miscellaneous Business

Demand Drafts

Telegraphic Transfers

STEPS (Electronic Transfers)

Collections (Cheques)

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A. INTRODUCTION TO TOPIC

Concept of financial statement:

Accounting is the process of identifying, measuring and communicating information to

its users. It involves recording, classifying various business transactions. The financial

statement used in accounting safes two statement profit & loss A/c or income statement

and Balance sheet or position statement. With the help of financial as well as the

outsider who are interested in affairs of the firms like creditors customers, supplies,

financial institution, encloses government, and public.

Definition:-

1. In the words of john N. Myer :- “the financial statement provides a summery

of the accounts of a business enterprise, the balance sheet is eating the assets,

liabilities and capital as on a creation date and the income statement showing

the result of operations during a certain period.”

2. According to Anthony :- financial statement essentially are interim reports,

presented annually and select a division of the life of an enterprise into more or

less arbitrary accounting reread more frequently a year.

1.3 : Importance of financial statement :

Financial statements constitute valuable piece of information to various uses in different

ways the utility of financial statement to different parties is discarded or follows :-

1. For the management :- Management is interested in knowing the existing

profits, possibility of growth, relative performances, cost information etc.

from the financial statement, so that it can be suitable strategy for its entity.

2. For the Creditors :- the creditors are to be paid in a short period the creditors

are interested in knowing entity’s capability to repay the amount and interest

as and when repayment, becomes due, so they are interested in finding out

profitability, cash flows etc. of the entity,

3. For the Manages :- Managers are interested in knowing the social image,

chances of promotion and the capacity of the entity to compensate them

Manager wants to know profitability and chances of grow the of the

company.

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4. For the employees :- Employs are interested in job satisfaction, job security,

promotion, bonus declaration, employees welfare scheme etc. of these unit,

so they wants to information an profit ability and future prospects of the

company.

5. For the bankers :-Bankers are interested in the security of the loan advanced,

firms capacity to repay the principal interact as per terms.

6. For the customers :- Customers are interested in raw product resource,

product safety, and socially responsible policies of the entity, Information

Statement and reports.

7. For the Society :- Society is interested in economic progress of the country

that depends upon the performance of individual economic entities.

8. For the Investor :- the investor inducing both type of short term and long

term investor Investor mill not only analyses the present financial position

but is will also study in future planning they wants to know now to safe the

investment already made is and how safe the proposed investment will be.

9. Share holder :- shareholders or proprietors of the business an interested in

the well being of the business, inky are likely to know the earning capacity of

the business and its prospects of the future growth.

10. Debenture holder :- debenture holders are interested to know whether the

financial position of the company is sound or not.

Financial Analysis :-

Concept of financial Analysis :- F.A an enterprise or a firm is the process of

identifying the financial strength and weakness of the firm by properly establishing

the scale township between the ions of the Balance sheet and project & loss A/c. the

tern financial analysis extends to include the interpretation of financial statement.

Definition 1.5

According to Metcalf R.W and Tetrad P.L :-

“Analyzing financial statements is a process of evaluating relationship between

component parts of financial statements to obtain a better understanding of forms,

position & performance”.

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Types of financial Analysis:-

Types of financial analysis

Basis of Material used Basis of method adopted

External Analysis Internal Horizontal Analysis

Analysis Retical Analysis

The analysis of financial statement for a firm car be undertaken in different ways,

different person or parties may be undertake the analysis of financial statement in the

analysis of financial state mint may be the shareholders, the creditors, the financial

institution the investor and the management itself. The analysis of financial statement

can be classified into different categories are as follows:

(i) on the basis of Material used :- According to material used, financial Analysis

can be of 2 types

(a) External analysis (b) Internal analysis

(a) External Analysis :- This analysis is performed by outside parties such as trade

creditors , investor, supplies of long debts etc. this type of analysis is conducted for

measuring the operational and managerial efficiency at different level of the firm. This

group depends almost contritely on published financial statements, this type of analyses

is very quite comprehension and sellable it is curried out on the basis of published

information or by there who do not have the detailed seconds of the company.

(b) Internal Analysis :- this analysis is performed by the corporate finance and

accounting department and is more detailed than external analysis. This is boned on

detailed information available to outsider this type of analysis for used of managerial

21

purpose and it can be effected depending upon the pus- pose to be ache cued. Its

conducted by the excite and emplaces of the enterprises as well as the governmental

and court agencies.

(ii) on the basis of Method adopted :- According to the method adopted, financial

analysis can also be of 2 types. :-

(a) Horizontal Analysis (b) vertical analysis

(a) Horizontal Analysis :- when financial statements for a number of years are

seaweed and analyses , this type of analysis is called Horizontal Analysis this analysis is

useful for long term trend analysis and planning. It is based on the data from year one

year to another are identified this to also known as the ‘Dynamic Analysis’. It cores a

period of more than I years. It compares the financial statement i.e. project & loss A/c

and Balance sheet of previous year along with the current year.

(b) Recital Analysis :- this analysis convert each element of the information into a

percentage of a total amount of statement so or to established relationship with other

components of the same statements it is based on relationship among items in a single

period. It can be provided by a study conducted over a numbers of years, so that

comparison can be effected. It is also known as the ‘vertical Analysis’.

Significance of financial Analysis:-

1. The main significance of financial Analysis depends upon the management,

invertors, Bankers, debenture holders, Government etc.

2. They want to know the capacity to meet the short term loans, financial

soundness in long run profitability or performance of one unit with other unit of

the same industry.

3. they also wants to find out whether the target and goods are achieved. or not

and they valuate the performance of different depart mints, investors want to

know the their investment is safe.

4. They are interested to know the financial portion of any concern.

5. People are financial statements Analysis for satisfying their particular curiosity.

1.8 Meaning of financial statement Analysis:-

Financial statement Analysis is establishing the relationships and interpretation

there of to understand the working and the financial position firm. There analysis of

financial statement is the process of establishing and identifying the financial weakness

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and strength of the firm. It is also known as the analysis of financial statement

evaluating the relationship between component parts of financial statement for getting

a better understanding of the firmer position and performance.

The basic tool of financial statement analysis is financial ratio analysis. It is

verified as follows:-

- Types of Financial

- Liquidity ratio

- Turnover ratio

- Leverages ratio

- Profitability ratio

- Growth ratio

- Valuation ratio

1.9 Methods of financial statement Analysis:-

The following methods of analysis are generally used:-

A. Comparative Method

B. Trend Analysis

C. Common size statement

D. Ratio Analysis

A. Comparative Statement:- The comparative financial statement are statement

of the financial position at different period; of time. The element of financial

position are shown in a comparative form so as to give an idea of financial

position at 2 or more periods. Any statement prepared in a comparative form

will be covered in comparative statement. Similarly, comparative figures will

indicate the trend & direction of financial position and operative results.

B. Trend Analysis:- The financial statement may be analysis by computing

trends of series of information. This method determines the direction up

words or downwards and involves the computation of the percentage

relationship that each statement item bears to the same item in base year.

The information for a number of years is taken up and one year, generally the

first year, is taken as a base year the figures of the base year are taken as 100

and trend ratios for other years are calculated on the basis of base year. The

analyst is able to see the trend of figures, whether upward or downward.

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C. Common size statement:- The Common size statement, balance sheet and

income statement, are shown in analytical percentages. The figures are

shown as percentage of total assets, total liabilities and total sales. The total

assets are taken as 100 and different assets are expressed as a percentage of

the total. Similarly, various liabilities are taken as a part of total liabilities.

D. Ratio Analysis:- The ratio analysis is one of the most powerful tools of

financial analysis. It is the process of establishing and interpreting various

ratios. It is with the help of ratios that the financial statement can be

analyzed more clearly and decisions made from such analysis. Ratio analysis

is not an end in itself. It is only means of better understanding of financial

strength.

METHOD OF FINANCIAL STATEMENT ANALYSIS

The analysis and interpretation of financial statements is used to explain the financial

position and result of operation as well there are different type of devices or methods

are used to study the relationship between different statements. Analysis of financial

statement is the process of establishing and identifying the financial weakness and

strength of the fire. The purpose of financial analysis is to diagnose the information

contained in financial statement so as to judge the profitability and financial soundness

of the firm. Financial statements analysis is an attempt to determine the significance and

meaning of the financial statement data. People use financial statement Analysis for

satisfying their particular curiosity. Most of the authors have used the term analysis only

to cover the meanings of both analysis and interpretation as the objective of analysis is

to study the relationship between various items of financial statements by interpreting

we have also used the term financial statement Analysis or simply “financial Analysis” to

cover the meaning of both analysis and interpretation.

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Techniques of financial statement Analysis:

Ratio’s

(A) (B)

(C)

Traditional Functional

Significance

Classification Classification

Ratios

1. Balance Sheet ratios 1. Liquidity ratio 1. Primary

ratio

Position Statement ratios 2. Leverages Ratio 2. Secondary

ratios

2. Profit & Loss Ak ratio 3. Actively ratio

Revenue/ Income Statement Raito 4. Profitability ratio

3. Composite/ Mixed Ratios

Inter Statement ratios.

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1.Limiteduse ofsingleRatio

2.

Lack of

Adequate

Standard s

3.

Rotios No

Substtute

6. Uncome.

Parable

7.Pe

rson

alB

ias

8.Pr

ice

Lev

elC

hang

e

4.

Change of

Accounting

Procediure

5.

Window

Dressing

Limitationof

RotioAnalysis

4.9 Limitation of ratio Analysis

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TECHNIQUES OF FINANCIAL STATEMENTS

Comparative Statement

Common Size Statement

Trend Analysis

Fund Flow Statement

Cash Flow Statement

Ratio Analysis

Comparative statement:- The comparative financial statements are statement of the

financial position at different periods; of time. The elements of Financial position are

shown in a comparative from so as to give an idea of financial position at 2 or more

periods. Any statement prepared in a comparative form will be covered in comparative

statements. From practical point of view, generally, tow financial Statements are

prepared in comparative form for financial analysis purposes. Not only the comparison

of the figures of two periods but also be relationship between balance sheet and income

statement enables an in-depth study of financial position and operative results. The

financial data will be comparative only when same accounting principles are used in

preparing these statements. In case of any deviation in the use of accounting principles

28

this fact must be mentioned at the foot of financial statements and the analyst should

be careful in using these statement. The two comparative statements are (i) Balance

sheet, and (ii) Income Statement.

(i) Comparative Balance sheet

(ii) Comparative Income statement

Common-size statement:-

The common-size statements, balance sheet and income statements are shown in

analytical percentages. The figures are shown as percentages of total assets, total

liabilities and total sales. The total assets are taken as 100 and different assets are

expressed as a percentage of the total. Similarly various liabilities are taken as a pat

of total liabilities. These statements are also known as compound percentage or

100% statement because every individual trend percentage where changes in items

could not be the analyst is able to assess the figures in relation to total values. The

common- size statement may be prepared in the following way: -

(1) The totals of assets or liabilities are taken as 100.

(2) The individual assets are expressed as a percentage i. e. 100 and different

liabilities are calculated in relation to total liabilities.

(i) Common- size balance sheet

(ii) Common size income statement

Trend Analysis:- The financial statements may be analyzed by computing trends of

series of information this method determines the direction upwards or downwards

and involves the computation of the percentage relationship that each statement

item bars to the same item in base year. The information for a number of years is

taken up and one year, generally the first year is taken as a base years. The figures of

the base year are taken as 100 and trend nations for other years are calculated on

the basis of base year. The analyst is able to see the trend of figures, whether

upward or downward. For examples if sales figures for the year 2000 to 2005 are to

be studied, then sales of 2000 will be taken as 100 and the percentage of sales for

all other years will be calculated in relation to the base year, i-e, 2000.

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Fund flow statement:- Fund flow statements is a method by which we study

changes in the financial position of a business enterprise between beginning and

ending financial statements dates. It is a statement showing sources and uses of

funds for a period of time. In other words the funds flow statement describes the

sources from which additional funds were derived and the use to which these

sources were put. Thus, funds flow statement is a statement which indicates various

means by which the finds have been obtained during a certain period and the ways

to which these funds have been used during that period. The term “funds’ used have

means working capital, i-e, the excess of current assets over current liabilities.

Cash flow statement:- Cash flow statement is a statement which describes the

inflows and outflows of cash and cash equivalents in an enterprise during a specified

period of time. Such a statement enumerates net effects of the various business

transactions on cash and its equivalents and takes into account receipts and

disbursements the cash. A cash flow statement summaries the causes of changes in

cash position of a business enterprise between dates of two balance Sheets. Cash

flow statement should present it for each period for which financial statements are

prepared. This statement should report cash flows during the period classified by

operating, investing and financing activities. Thus, cash flows are classified into 3

main categories:-

(i) Cash flow from operating activities.

(ii) Cash flow from investing activities.

(iii) Cash flow from financing activities.

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Ratio Analysis:

Meaning:- Ratio Analysis is a technique of analysis and interpretation of financial

statements. It is the process of establishing and interpreting various ratios for helping in

making certain decision. Ratio Analysis is not an end in itself. It is only a means of better

understanding of financial strengths and weaknesses of a firm. It is one of the most

powerful tools of financial analysis. “ A ratio is known as a symptom like Blood pressure

the rules rate or the temperature of an individual’. It is with help of ratios that the

financial statements can be analyzed more early and decisions made from such analysis.

Limitation of Ratio Analysis: -

1. Limited use of a single ratio

2. Lack of Adequate standards

3. Ratios no substitute.

4. Change of Accounting procedure.

5. Window dressing

6. Incomparable

7. Personal bias

8. Price level changes

Classification of Ratios:

Various accounting ratios can be classified as follows:-

(A) Traditional classification or statement ratios

(1) Balance sheet ratios or position statement ratio:

Balance sheet ratios deal with the relationship between two balanced sheet

items. E.g. the ratio of current assets to current liabilities, or the ratio of

proprietors funds to fixed assets. The various balance sheet ratios have been

named in the chart classifying statements ratios.

(2) Profit & loss a/c ratios or revenue/Income statement ratio :-

This ratio deal with the relationship between two profit & loss A/C items. E.g. the

ratio of gross profit to sales, or the ratio of Net profit to sales. The various profit

& loss A/ ratios, commonly used, are named in the chart classifying statement

ratios.

31

(3) Composite/mixed ratios or inter statement ratios:-

These ratios exhibit the relationship between a profit & loss A/c or Income

statement item and a balance sheet item, e.g. stock turnover ratio, or the ratio of

total assets to sales. The most Commonly used inter-statement ratios are given in

the chart exhibiting traditional classification or statement ratios.

(B) Functional classification or Classification According to test

(1) Liquidity Ratios: - These are the ratios which measure the short term solvency or

financial position of a firm the various liquidity ration are: current ratio, liquid ratio and

absolute liquid ratio.

(2) Leverage Ratios:- Leverages ratio convey a firms ability to meet the interest cost

and repayments. Schedules of its long term obligations e.g. debt Equity Ratio and

Interest Coverage Ratio.

Activity Ratios:- Activity ratios are calculated to measure the efficiency with which the

resources of a firm have been employed. The various activity or turnover ratios have

been named in the chart classifying the ratios.

32

B. OBJECTIVES

Objectives of the research study

Management of working capital is very essential in modern business.

Financial statement analysis of working capital is also very useful for short term

management of time.

The following are the main objectives of my research study.

i. To analyze the sources of financial analysis of STATE BANK OF INDIA bank.

ii. To analyze the sources of financial management of STATE BANK OF INDIA

bank.

iii. To examine the overall financial management of STATE BANK OF INDIA

bank.

33

C. RESEARCH METHODOLOGY

RESEARCH OBJECTIVESThe above mentioned review literature would have clearly indicated the two different

strategies adopted by the two competing brands in Singapore automobile market. In

order to understand the depth of the topic the research objectives have been set by the

researcher.

Research DesignAccording to Aaker, Kumar & Day (2001) descriptive research covers a large proportion

of marketing research. This being a quantitative research which is to decide of how one

variable affects another variable, there are three basic types of research design that is

exploratory, casual and descriptive research design. A descriptive research design is the

one that describes something such as demographic characteristics of consumers who

uses a product or a service. The descriptive study is typically concerned with

determining frequency with which something occurs or how two variables vary. Aaker

and George (2000), a descriptive study establishes only associations between variables.

The purpose is to provide an accurate snapshot of some aspect of the market

environment.

There are three types of research designs, namely:

(a) Exploratory

(b) Descriptive,

(c) Causative

Exploratory Research:

According to Rajan Saxena, Exploratory research is conducted when the researcher does

not know how and why a certain phenomenon occurs. In doing so, they used focus

groups. Since the prime goal of an exploratory research is to know the unknown, this

research is unstructured. Focus groups, interviewing key customer groups, experts and

even search for printed or published information are some common techniques.

34

Descriptive Research:

Descriptive research is carried out to describe a phenomenon or market characteristic.

Generally, descriptive research is carried out only when the researcher understands the

phenomena or behavioral characteristics.

Causative Research:

Causative research is done to establish a cause and effective relationship. Here the

researcher may like to see the effect of rising income and changing life style on

consumption of select products. In a causative research, unlike exploratory or

descriptive, hypotheses are tested. Hypothesis is a statement of predicted outcomes of

the research. In building up a hypothesis, it is important that the researcher understands

the phenomena thoroughly, or a body of research that exists on the subject matter

Descriptive research studies are those study which are concerned with describing the

character. It is move valuable because researcher has no control over the variables

what has happened or what is happening is considered so it is very accurate so we can

say it is more valuable.

In this study, for practical reasons, a descriptive approach would be used, considering

the proposed study would embrace the above characteristics of a descriptive study.

Types of Research

The object is comparing the brand equity of European and Asian automotive brands.

Simple way to find out the relative success of one of the two identical car sold in

Singapore. In a research when we talk of research methodology, we not only take

Research methodology, but also considered the logic behind the method we used in the

contest of our research study and explain why we are using a particular method. This

way we can be stated as under.

1. It relies on empirical evidence

2. it utilize relevant concepts

3. it is committed to only objective consideration

4. it result into probabilistic prediction

35

In a method particular research problem involve usually the consideration of the

followings means of obtaining the information

Explanation of the way in which related means of obtaining information will be

organized and the reasoning leading to the selection Investing the reasons for human

behavior i.e. people thinks or do certain thinks so we comes for quantitative reaches

Types of research are generally classified into two methodologies, qualitative and

quantitative. Malhotra (2004) defines qualitative research as “An unstructured,

exploratory research methodology based on small samples that provides insights and

understanding of the problem setting” and quantitative research as “a research

methodology that seeks to

Quantify the data and, typically applies some form of statistical analysis”. There are

merits and demerits of both methodologies (illustrated in following Table4.1).

TABLE 5.1 – Qualitative versus Quantitative Research

Qualitative Research Quantitative Research

"All research ultimately has

a qualitative grounding"

- Donald Campbell

"There's no such thing as

qualitative data.

Everything is either 1 or 0"

- Fred Kerlinger

aimcomplete, detailed

description.

The aim is to classify

features, count them,

and construct statistical

models in an attempt to

explain what is

observed.

Researcher may only know roughly

idea.

May clearly in advance

Recommended Initially of research

process

Last phases of research

projects.

36

design Come out in later stage

of dissertation.

All aspects of the study

are carefully designed

before data is collected.

Researcher is the data

gathering instrument.

Researcher uses tools,

such as questionnaires

or equipment to collect

numerical data.

Data is in the form of

words, pictures or

objects.

Data is in the form of

numbers and statistics.

Subjective - individuals’

interpretation of events

is important ,e.g., uses

participant observation,

in-depth interviews etc.

Objective – seeks precise

measurement & analysis of

target concepts, e.g., uses

surveys, questionnaires etc

Qualitative data is more

'rich', time consuming,

and less able to be

generalized.

Quantitative data is

more efficient, able to

test hypotheses, but

may miss contextual

detail.

Researcher tends to

become subjectively

immersed in the subject

matter.

Researcher tends to

remain objectively

separated from the

subject matter.

37

Descriptive research studies are those study which are concerned with describing the

character. It is move valuable because researcher has no control over the variables

what has happened or what is happening is considered so it is very accurate so we can

say it is more valuable.

. In a research when we talk of research methodology, we not only take Research

methodology, but also considered the logic behind the method we used in the contest of

our research study and explain why we are using a particular method. This way we can

be stated as under.

It relies on empirical evidence

it utilize relevant concepts

it is committed to only objective consideration

it result into probabilistic prediction

In a method particular research problem involve usually the consideration of the

followings

the means of obtaining the information

Explanation of the way in which related means of obtaining information

will be organized and the reasoning leading to the selection Investing the

reasons for human behavior i.e. people thinks or do certain thinks so we

comes for quantitative reaches

The research methodology used for this study was geared towards obtaining

quantitative data.

Collection of Secondary Data

According to Thorne (1990), Secondary data means data that is already available i.e., it

refers to the data, which have already been collected and analyzed by someone else.

Secondary data may either be published data or unpublished data. Although the

researcher has not used the secondary data for the purpose of analysis this has been

extensively used by the researcher to explore various theories attached with the topic

that is brand strategy.

38

Limitation of the study

1. The study is based in published internal reports & data of the STATE BANK OF INDIA

BANK.

2. The study is limited to a period of 5 yrs

3. No comparison is made b/w the others.

RESEARCH DESIGN

Research Design is the plan and structure of the in ventilation to obtain answer to

research question the plan is the overall scheme, which will be done from writing of

the hypothecates to the final analysis.

Research design are often dependent on the steps which we referred as

research design. in research design the researcher decides hour his objectives will

be revised by the research. in research design we find answer of same question that

we what would be the study. Where would the study take place, which data to be

studied, what method should be adopted and how much should be collected of

tells us how the data will be collected Research Design start from the writing of

hypothesis & it ends to writing of report.

The significance of research design is so give maximum results and effectively

researches to be carried to avoid trial error. Thus preparation of the research design

should be done with great care as any error may affect the whole study.

Data Analysis

For any research the purpose of achieving the objectives is a very important criterion.

Unless the information drawn from the survey is properly interpreted and explained the

very purpose of a research cannot be served. Hence data analysis and interpretation is a

very important aspect in a project report. Analysis of data is the process of orderly

research objectives. The primary data collection is in accurate form that is not ready for

analysis. So the researcher must take some measures to bring the data to a form where

it can be easily analyzed. The various steps include editing (modifying, correcting the

collected data), coding and tabulation (arranging similar data together). The analysis is

carried using statistical tools like percentages. Percentage is a special kind of ratio.

Percentage is used in making comparison between two or more series of data. Thus the

39

analysis is totally based on frequency and percentage calculation. Finally meaningful

information is extracted from the analysis. The collected data is illustrated using pie

diagram and bar charts. The conclusions, findings and suggestions are given on the

inference drawn from the analysis.

40

Scope of the Research Study

The scope of this research study relates to working capital management of

STATE BANK OF INDIA bank. The analysis of working capital has been made

against the financial performance status in the present day world.

The important aspects of working capital management which have

received adequate attention are production policies, size of the business, length

of manufacturing cycle, credit policy, turnover of circulating capital, economics of

scale, current asset policies and other factors. A number of ratios have been

calculated to know the exact working capital position and a number of suggestion

have been made to improve the current efficiency of the management. On the

basis of above calculations any manufacturing company can analyze the working

capital position of their business.

41

D. LIMITATIONS

Limitations of the research study

Every research study has to encounter some constraints. The major

constraints, which present day study had to face, are non-availability of

sufficient data. Also the study is based on the analysis of financial

statements for the last ten years only. The data used in this study have

been taken from published annual reports only ie, in this study secondary

data collection method is used. Hence the limitations of secondary data

will be the limitations of this research study.

42

COMPANY PROFILE

43

3. COMPANY PROFILE

State Bank of India

Type Public

Traded as

NSE: STATE BANK OF INDIA N

BSE: 500112

LSE: STATE BANK OF INDIA D

BSE SENSEX Constituent

Industry Banking, Financial services

Founded July 1, 1955

Headquarters Mumbai, Maharashtra, India

Area served Worldwide

Key peoplePratip Chaudhuri

(Chairman)

Products

Credit cards, Consumer banking,

corporate banking, finance and

insurance, investment banking,

mortgage loans, private banking,

wealth management

Revenue US$32.44 billion (2011)[1]

44

http://en.wikipedia.org/wiki/State_Bank_of_India#cite_note-10-K-0

http://en.wikipedia.org/wiki/Wealth_management

http://en.wikipedia.org/wiki/Private_banking

http://en.wikipedia.org/wiki/Mortgage_loan

http://en.wikipedia.org/wiki/Investment_banking

http://en.wikipedia.org/wiki/Financial_services


http://en.wikipedia.org/wiki/Commercial_bank

http://en.wikipedia.org/wiki/Retail_banking

http://en.wikipedia.org/wiki/Credit_card

http://en.wikipedia.org/wiki/Pratip_Chaudhuri

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Maharashtra

http://en.wikipedia.org/wiki/Mumbai


http://en.wikipedia.org/wiki/BSE_SENSEX

http://www.londonstockexchange.com/exchange/prices-and-news/stocks/prices-search/stock-prices-search.html?nameCode=SBID

http://en.wikipedia.org/wiki/London_Stock_Exchange

http://www.bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=500112

http://en.wikipedia.org/wiki/Bombay_Stock_Exchange

http://www.nseindia.com/marketinfo/companyinfo/companysearch.jsp?cons=SBIN&section=7

http://en.wikipedia.org/wiki/National_Stock_Exchange_of_India

http://en.wikipedia.org/wiki/Ticker_symbol

http://en.wikipedia.org/wiki/Types_of_business_entity

Profit US$2.34 billion (2011)[1]

Total assets US$369.56 billion (2011)[1]

Total equity US$18.71 billion (2011)[1]

Owner(s) Government of India

Employees 222,933 (2011)[1]

Website www.statebankofindia.com

State Bank of India (NSE: STATE BANK OF INDIA N, BSE: 500112, LSE: STATE BANK OF

INDIA D) is the largest banking and financial services company in India by revenue, assets

and market capitalization. It is a state-owned corporation with its headquarters in

Mumbai, Maharashtra. As of March 2011, it had assets of US$370 billion with over

13,000 outlets including 150 overseas branches and

State Bank of India

State Bank of India (NSE: STATE BANK OF INDIA N, BSE: 500112, LSE: STATE BANK OF

INDIA D) is the largest banking and financial services company in India by revenue, assets

and market capitalization. It is a state-owned corporation with its headquarters in

Mumbai, Maharashtra. As of March 2011, it had assets of US$370 billion with over

13,000 outlets including 150 overseas branches and agents globally. The bank traces its

ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of

the Bank of Calcutta, making it the oldest commercial bank in the Indian Subcontinent.

Bank of Madras merged into the other two presidency banks—Bank of Calcutta and

Bank of Bombay—to form the Imperial Bank of India, which in turn became the State

Bank of India. The Government of India nationalized the Imperial Bank of India in 1955,

with the Reserve Bank of India taking a 60% stake, and renamed it the State Bank of

India. In 2008, the government took over the stake held by the Reserve Bank of India.

STATE BANK OF INDIA is ranked #292 globally in Fortune Global 500 list in 2011.[2]

STATE BANK OF INDIA provides a range of banking products through its vast network of

branches in India and overseas, including products aimed at non-resident Indians (NRIs).

45

http://en.wikipedia.org/wiki/Non-resident_Indian

http://en.wikipedia.org/wiki/State_Bank_of_India#cite_note-1

http://en.wikipedia.org/wiki/Fortune_Global_500

http://en.wikipedia.org/wiki/Reserve_Bank_of_India

http://en.wikipedia.org/wiki/Government_of_India

http://en.wikipedia.org/wiki/Indian_Subcontinent

http://en.wikipedia.org/wiki/Bank_of_Calcutta

http://en.wikipedia.org/wiki/Imperial_Bank_of_India

http://en.wikipedia.org/wiki/British_Raj

http://en.wikipedia.org/wiki/Mumbai,_Maharashtra

http://en.wikipedia.org/wiki/Government-owned_corporation

http://en.wikipedia.org/wiki/Market_capitalization

http://en.wikipedia.org/wiki/Financial_service








http://en.wikipedia.org/wiki/Mumbai,_Maharashtra

http://en.wikipedia.org/wiki/Government-owned_corporation

http://en.wikipedia.org/wiki/Market_capitalization

http://en.wikipedia.org/wiki/Financial_service








http://www.statebankofindia.com/




http://en.wikipedia.org/wiki/Equity_(finance)


http://en.wikipedia.org/wiki/Asset


http://en.wikipedia.org/wiki/Net_income


The State Bank Group, with over 16,000 branches, has the largest banking branch

network in India. STATE BANK OF INDIA has 14 local head offices situated at Chandigarh,

Delhi, Lucknow, Patna, Kolkata, Guwahati (North East Circle), Bhuwaneshwar,

Hyderabad, Chennai, Trivandram, Banglore, Mumbai, Bhopal & Ahmedabad and 57

Zonal Offices that are located at important cities throughout the country. It also has

around 130 branches overseas.

STATE BANK OF INDIA is a regional banking behemoth and is one of the largest financial

institutions in the world. It has a market share among Indian commercial banks of about

20% in deposits and loans.[3] The State Bank of India is the 29th most reputed company

in the world according to Forbes.[4] Also, STATE BANK OF INDIA is the only bank featured

in the coveted "top 10 brands of India" list in an annual survey conducted by Brand

Finance and The Economic Times in 2010.[5]

The State Bank of India is the largest of the Big Four banks of India, along with ICICI

Bank, Punjab National Bank and HDFC Bank—its main competitors.[6]

History

The roots of the State Bank of India lie in the first decade of 19th century, when the

Bank of Calcutta, later renamed the Bank of Bengal, was established on June 2, 1806.

The Bank of Bengal was one of three Presidency banks, the other two being the Bank of

Bombay (incorporated on April 15, 1840) and the Bank of Madras (incorporated on July

1, 1843). All three Presidency banks were incorporated as joint stock companies and

were the result of the royal charters. These three banks received the exclusive right to

issue paper currency in 1861 with the Paper Currency Act, a right they retained until the

formation of the Reserve Bank of India. The Presidency banks amalgamated on January

27, 1921, and the re-organized banking entity took as its name Imperial Bank of India.

The Imperial Bank of India remained a joint stock company.

Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of

India, which is India's central bank, acquired a controlling interest in the Imperial Bank of

India. On April 30, 1955, the Imperial Bank of India became the State Bank of India. The

government of India recently acquired the Reserve Bank of India's stake in STATE BANK

46


http://en.wikipedia.org/wiki/Central_Bank



http://en.wikipedia.org/wiki/Imperial_Bank_of_India


http://en.wikipedia.org/wiki/Royal_charter

http://en.wikipedia.org/wiki/Joint_stock_company

http://en.wikipedia.org/wiki/Bank_of_Madras

http://en.wikipedia.org/wiki/Bank_of_Bombay

http://en.wikipedia.org/wiki/Bank_of_Bombay

http://en.wikipedia.org/wiki/Bank_of_Bengal

http://en.wikipedia.org/wiki/Bank_of_Calcutta


http://en.wikipedia.org/wiki/HDFC_Bank

http://en.wikipedia.org/wiki/Punjab_National_Bank

http://en.wikipedia.org/wiki/ICICI_Bank

http://en.wikipedia.org/wiki/ICICI_Bank

http://en.wikipedia.org/wiki/Big_Four_(banks)#India

http://en.wikipedia.org/wiki/State_Bank_of_India#cite_note-top10-4

http://en.wikipedia.org/wiki/Brand_Finance

http://en.wikipedia.org/wiki/Brand_Finance


http://en.wikipedia.org/wiki/Forbes


OF INDIA so as to remove any conflict of interest because the RBI is the country's

banking regulatory authority.

In 1959, the government passed the State Bank of India (Subsidiary Banks) Act, enabling

the State Bank of India to take over eight former state-associated banks as its

subsidiaries. On September 13, 2008, the State Bank of Saurashtra, one of its associate

banks, merged with the State Bank of India.

STATE BANK OF INDIA has acquired local banks in rescues. For instance, in 1985, it

acquired the Bank of Cochin in Kerala, which had 120 branches. STATE BANK OF INDIA

was the acquirer as its affiliate, the State Bank of Travancore, already had an extensive

network in Kerala.

International presence

As of December 31, 2009, the bank had 157 overseas offices spread over 32 countries. It

has branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Tehran,

Johannesburg, London, Los Angeles, Male in the Maldives, Muscat, Dubai, New York,

Osaka, Sydney, and Tokyo. It has offshore banking units in the Bahamas, Bahrain, and

Singapore, and representative offices in Bhutan and Cape Town. It also has an ADB in

Boston, USA.

STATE BANK OF INDIA operates several foreign subsidiaries or affiliates. In 1990, it

established an offshore bank: State Bank of India (Mauritius).

In 1982, the bank established a subsidiary, State Bank of India (California), which now

has ten branches – nine branches in the state of California and one in Washington, D.C.

The 10th branch was opened in Fremont, California on 28 March 2011. The other eight

branches in California are located in Los Angeles, Artesia, San Jose, Canoga Park, Fresno,

San Diego, Tustin and Bakersfield.

The Canadian subsidiary, State Bank of India (Canada) also dates to 1982. It has seven

branches, four in the Toronto area and three in British Columbia.

47

http://en.wikipedia.org/wiki/British_Columbia

http://en.wikipedia.org/wiki/Toronto

http://en.wikipedia.org/wiki/Cape_Town

http://en.wikipedia.org/wiki/Bhutan

http://en.wikipedia.org/wiki/Singapore

http://en.wikipedia.org/wiki/Bahamas

http://en.wikipedia.org/wiki/Offshore_bank

http://en.wikipedia.org/wiki/Osaka

http://en.wikipedia.org/wiki/Muscat,_Oman

http://en.wikipedia.org/wiki/Maldives

http://en.wikipedia.org/wiki/Johannesburg

http://en.wikipedia.org/wiki/Tehran

http://en.wikipedia.org/wiki/Dhaka

http://en.wikipedia.org/wiki/Colombo

http://en.wikipedia.org/wiki/State_Bank_of_Travancore

http://en.wikipedia.org/wiki/Kerala

http://en.wikipedia.org/wiki/State_Bank_of_Saurashtra

In Nigeria, STATE BANK OF INDIA operates as INMB Bank. This bank began in 1981 as

the Indo-Nigerian Merchant Bank and received permission in 2002 to commence retail

banking. It now has five branches in Nigeria.

In Nepal, STATE BANK OF INDIA owns 55% of Nepal STATE BANK OF INDIA Bank, which

has branches throughout the country. In Moscow, STATE BANK OF INDIA owns 60% of

Commercial Bank of India, with Canara Bank owning the rest. In Indonesia, it owns 76%

of PT Bank Indo Monex.

The State Bank of India already has a branch in Shanghai and plans to open one in

Tianjin.[7]

In Kenya, State Bank of India owns 76% of Giro Commercial Bank, which it acquired for

US$8 million in October 2005.[8]..

The State Bank of India (with 74% of the total capital) alongwith the largest global

banking group—BNP Paribas (with 26% of the remaining capital) headquatered in Paris

—formed a joint venture which established India's most reputed and trusted life

insurance company named STATE BANK OF INDIA Life Insurance company Ltd. in March

2001.

Associate banks

STATE BANK OF INDIA has five associate banks; all use the same logo of a blue circle and

all the associates use the "State Bank of" name, followed by the regional headquarters'

name:

State Bank of Bikaner & Jaipur

State Bank of Hyderabad

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore

Earlier STATE BANK OF INDIA had only seven associate banks that constituted the State

Bank Group. Originally, the then seven banks that became the associate banks belonged

48

http://en.wikipedia.org/wiki/State_Bank_of_Travancore

http://en.wikipedia.org/wiki/State_Bank_of_Patiala

http://en.wikipedia.org/wiki/State_Bank_of_Mysore

http://en.wikipedia.org/wiki/State_Bank_of_Hyderabad

http://en.wikipedia.org/wiki/State_Bank_of_Bikaner_%26_Jaipur

http://en.wikipedia.org/wiki/BNP_Paribas


http://en.wikipedia.org/wiki/Giro_Commercial_Bank

http://en.wikipedia.org/wiki/Kenya


http://en.wikipedia.org/wiki/Tianjin

http://en.wikipedia.org/wiki/Indonesia

http://en.wikipedia.org/wiki/Canara_Bank

http://en.wikipedia.org/wiki/Commercial_Bank_of_India

http://en.wikipedia.org/wiki/Nepal

http://en.wikipedia.org/wiki/Nigeria

to princely states until the government nationalized them between October 1959 and

May 1960. In tune with the first Five Year Plan, emphasizing the development of rural

India, the government integrated these banks into the State Bank of India system to

expand its rural outreach. There has been a proposal to merge all the associate banks

into STATE BANK OF INDIA to create a "mega bank" and streamline operations.[9]

The first step towards unification occurred on August 13, 2008 when State Bank of

Saurashtra merged with STATE BANK OF INDIA, reducing the number of state banks

from seven to six. Then on June 19, 2009 the STATE BANK OF INDIA board approved the

merger of its subsidiary, State Bank of Indore, with itself. STATE BANK OF INDIA holds

98.3% in State Bank of Indore. (Individuals who held the shares prior to its takeover by

the government hold the balance of 1.77%.)

The acquisition of State Bank of Indore added 470 branches to STATE BANK OF INDIA 's

existing network of 12,448 and over 21,000 ATMs. Also, following the acquisition, STATE

BANK OF INDIA’s total assets will inch very close to the 10 trillion marks. The total

assets of STATE BANK OF INDIA and the State Bank of Indore stood at 9,981,190 million

as of March 2009. The process of merging of State Bank of Indore was completed by

April 2010, and the STATE BANK OF INDIA Indore branches started functioning as STATE

BANK OF INDIA branches on August 26, 2010.[11]

Non-banking subsidiaries

Apart from its five associate banks, STATE BANK OF INDIA also has the following non-

banking subsidiaries:

1. STATE BANK OF INDIA Capital Markets Ltd

2. STATE BANK OF INDIA Funds Management Pvt Ltd

3. STATE BANK OF INDIA Factors & Commercial Services Pvt Ltd

4. STATE BANK OF INDIA Cards & Payments Services Pvt. Ltd. (STATE BANK OF INDIA

CPSL)

49


http://en.wikipedia.org/wiki/State_Bank_of_Indore

http://en.wikipedia.org/wiki/State_Bank_of_Indore




http://en.wikipedia.org/wiki/Indian_Princely_States

5. STATE BANK OF INDIA DFHI Ltd

6. STATE BANK OF INDIA Life Insurance Company Ltd.

7. STATE BANK OF INDIA General Insurance

Current Board of Directors

After the end of O. P. Bhatt's reign as STATE BANK OF INDIA chairman on March 31,

2011, the post was taken over by Pratip Chaudhuri, who is the former deputy managing

director of the international division of STATE BANK OF INDIA. As of August 4, 2011,

there are twelve members in the STATE BANK OF INDIA board of directors, including

Subir Gokarn, who is also one of the four deputy governors of the Reserve Bank of India.

The complete list of the Board members is:

1. Pratip Chaudhuri (Chairman)

2. Hemant G. Contractor (Managing Director)

3. Diwakar Gupta (Managing Director)

4. A Krishna Kumar (Managing Director)

5. Dileep C Choksi (Director)

6. S. Venkatachalam (Director)

7. D. Sundaram (Director)

8. Parthasarathy Iyengar (Director)

9. G. D. Nadaf (Officer Employee Director)

10. Rashpal Malhotra (Director)

11. D. K. Mittal (Director)

12. Subir V. Gokarn (Director)[12]

Branches of STATE BANK OF INDIA State Bank of India has 172 foreign offices in 37 countries across the globe.

STATE BANK OF INDIA has about 25,000 ATMs (25,000th ATM was inaugurated

by the then Chairman of State Bank Shri O.P. Bhatt on 31 March 2011, the day of

50



http://en.wikipedia.org/wiki/Subir_Gokarn

http://en.wikipedia.org/wiki/Pratip_Chaudhuri

http://en.wikipedia.org/wiki/O._P._Bhatt

his retirement); and STATE BANK OF INDIA group (including associate banks) has

about 45,000 ATMs.

STATE BANK OF INDIA has 21,500 branches, including branches that belong to its

associate banks.

STATE BANK OF INDIA includes 99345 offices in India.

India's number one ADB is in Bellary i e State bank of India Bellary ADB

Symbol and slogan The symbol of the State Bank of India is a circle and not key hole and a small man

at the centre of the circle. A circle depicts perfection and the common man being

the centre of the bank's business.

Slogans : "Pure banking nothing else"

also includes : "With you - all the way" and : "a bank of common man"

Loan to NTPC

On July 8, 2011, STATE BANK OF INDIA agreed to give a loan of 100 billion to NTPC

(National Thermal Power Corporation), making it the largest loan STATE BANK OF INDIA

had ever given to any single customer in its entire 200 year history. The loan had a

"door-to-door" maturity period of 12 years, accompanied by a drawdown period of four

years. An NTPC press release said at the time of the declaration of the loan that: "The

loan shall be utilized for financing the capital expenditure of ongoing and new projects."

NTPC chairman at the time, Arup Roy Choudhury clarified that the loan amount would

be used to add 128,000 MW capacity by the end of year 2032 (NTPC'c capacity at the

time of the declaration of the loan was 34,584 MW).[13]

This loan was offered amidst declining finance for power projects in India, which were a

direct result of the lending constraints placed by the Reserve Bank of India and the

increased risk awareness of power projects. It will also help minimize the shortfall of

around 4.51 trillion that the Power Ministry of India expected to incur in achieving the

objectives of the Eleventh Five Year Plan (This plan targeted an addition of 78,577 MW

or power generation capacity which would require an investment of 10.3 trillion).

51



http://en.wikipedia.org/wiki/National_Thermal_Power_Corporation

Employees

STATE BANK OF INDIA has turned into the third-largest employer in India among listed

companies after Coal India Limited (383,347) and Tata Consultancy Services(226,751).

Recent awards and recognitions Best Online Banking Award, Best Customer Initiative Award & Best Risk

Management Award (Runner Up) by IBA Banking Technology Awards 2010

The Bank of the year 2009, India (won the second year in a row) by The Banker

Magazine

Best Bank – Large and Most Socially Responsible Bank by the Business Bank

Awards 2009

Best Bank 2009 by Business India

The Most Trusted Brand 2009 by The Economic Times

Most Preferred Bank & Most preferred Home loan provider by CNBC

Visionaries of Financial Inclusion By FINO

Technology Bank of the Year by IBA Banking Technology Awards

SKOCH Award 2010 for Virtual corporation Category for its e-payment solution

The Brand Trust Report[16]: 11th most trusted brand in India.

52


http://en.wikipedia.org/wiki/The_Brand_Trust_Report

http://en.wikipedia.org/wiki/Tata_Consultancy_Services

http://en.wikipedia.org/wiki/Coal_India_Limited

http://en.wikipedia.org/wiki/India

DATA ANALYSIS AND

INTERPRETATION

55

3. DATA ANALYSIS AND INTERPRETATION

AssetsAssets

Assets

Cash & Balances with RBI 119,349.83 82,195.58 74,161.07 74,817.26 45,066.10

Balance with Banks, Money

at Call 35,977.62 39,653.42 51,100.63 14,211.16 27,410.76

Advances 1,006,401.55 869,501.64 750,362.38 603,221.94 487,285.96

Investments 419,066.45 402,754.13 372,231.45 273,841.72 216,521.05

Gross Block 17,543.26 15,886.95 14,063.96 12,641.08 11,274.90

Accumulated Depreciation 11,402.13 10,359.09 9,127.29 8,224.86 7,425.54

Net Block 6,141.13 5,527.86 4,936.67 4,416.22 3,849.36

Capital Work In Progress 345.7 486.03 286.81 246.57 150.02

Other Assets 60,615.96 50,025.30 51,746.73 56,514.65 34,891.16

Minority Interest 0 0 0 0 0

Group Share in Joint Venture 0 0 0 0 0

Total Asset 1,647,898.24 1,450,143.96 1,304,825.74 1,027,269.52 815,174.41

56

Capital and Liabilities

Capital and Liabilities:

Total Share Capital 635 634.88 634.88 631.47 526.3

Equity Share Capital 635 634.88 634.88 631.47 526.3

Share Application Money 0 0 0 0 0

Preference Share Capital 0 0 0 0 0

Init. Contribution Settler 0 0 0 0 0

Preference Share Application

Money 0 0 0 0 0

Employee Stock Option 0 0 0 0 0

Reserves 82,836.25 82,500.70 71,755.51 60,604.91 42,009.35

Revaluation Reserves 0 0 0 0 0

Net Worth 83,471.25 83,135.58 72,390.39 61,236.38 42,535.65

Deposits 1,255,562.48 1,116,464.56 1,011,988.33 776,416.52 636,272.88

Borrowings 142,470.77 122,074.57 64,591.64 66,023.17 48,661.83

Total Debt 1,398,033.25 1,238,539.13 1,076,579.97 842,439.69 684,934.71

Minority Interest 2,977.17 2,631.27 2,228.27 2,028.12 1,689.94

Policy Holders Funds 0 0 0 0 0


Other Liabilities & Provisions 163,294.96 125,837.97 153,627.10 121,565.33 86,014.12

Total Liabilities 1,644,799.46 1,447,512.68 1,302,597.46 1,025,241.40 813,484.48

57

Current Asset

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

Current Asset 1,647,898.24 1,450,143.96 1,304,825.74 1,027,269.52 815,174.41

58

Current Liability


Current liability 1,644,799.46 1,447,512.68 1,302,597.46 1,025,241.40 813,484.48

59

CURRENT RATIOS:

Current ratio

The current ratio is a financial ratio that measures whether or not a firm has enough

resources to pay its debts over the next 12 months. It compares a firm's current assets

to its current liabilities. It is expressed as follows:

For example, if WXY Company's current assets are 50,000,000 and its current liabilities

are 40,000,000, then its current ratio would be 50,000,000 divided by 40,000,000, which

equals 1.25. It means that for every dollar the company owes in the short term it has

1.25 available in assets that can be converted to cash in the short term. A current ratio

of assets to liabilities of 2:1 is usually considered to be acceptable (i.e., your current

assets are twice your current liabilities).

The current ratio is an indication of a firm's market liquidity and ability to meet creditor's

demands. Acceptable current ratios vary from industry to industry. If a company's

current ratio is in this range, then it is generally considered to have good short-term

financial strength. If current liabilities exceed current assets (the current ratio is below

1), then the company may have problems meeting its short-term obligations. If the

current ratio is too high, then the company may not be efficiently using its current assets

or its short-term financing facilities. This may also indicate problems in working capital

management.

Low values for the current or quick ratios (values less than 1) indicate that a firm may

have difficulty meeting current obligations. Low values, however, do not indicate a

critical problem. If an organization has good long-term prospects, it may be able to

borrow against those prospects to meet current obligations. Some types of businesses

usually operate with a current ratio less than one. For example, if inventory turns over

60

http://en.wikipedia.org/wiki/Market_liquidity

http://en.wikipedia.org/wiki/Current_liabilities

http://en.wikipedia.org/wiki/Current_asset

http://en.wikipedia.org/wiki/Financial_ratio

much more rapidly than the accounts payable become due, then the current ratio will be

less than one. This can allow a firm to operate with a low current ratio.

If all other things were equal, a creditor, who is expecting to be paid in the next 12

months, would consider a high current ratio to be better than a low current ratio, because

a high current ratio means that the company is more likely to meet its liabilities which fall

due in the next 12 months.


Current Ratio 0.04 0.04 0.04 0.07 0.05

Current Ratio

Interpretation : Current ratio is increasing from 2007 to 2010 so it is having stong

financial position

61

QUICK OR ACID TEST OR LIQUID RATIOQuick ratio, also known as Acid Test or liquid Ratio, is a more rigorous test of

liquidity than the current ratio. Quick ratio may be defined as the relationship between

quick/liquid assets and current or liquid liabilities. The quick ratio can be calculated by

dividing the total of the quick assets by total current liabilities thus,

Quick/liquid or Acid test ratio =


Quick Ratio 1.4 1.47 1.24 1.08 1.03

Source: Calculations Based on Annual Reports of JP CEMENT from 2007 - 2011,

62

Net Profit ratio


Net Profit Ratio 0.65 0.91 1.08 1.04 0.86

63

OBSERVATION AND FINDINGS

64

4. OBSERVATION AND FINDINGS

1) The working capital of the bank which was Rs. 2446.07 crs. As on 31 st march

2008 & stood at Rs. 4269.81 On 31st march 2007 there was a marginal increase in

the banks working capital by 5057.18 Crs.

2) The borrowing had risen to 652.41 Crs. @8.2% rose from the year end 2000-

2006.At present it is on a decline standing at 596.46 for the year ended 2008-09.

3)The loans and advanceof the which were at Rs. 2095.30 Crs. as on 31st mar.2007

increase and stood at Rs. 2450.12 Crs. as on 31st march, 2008 and as on 31st

march it is decreased with Rs. 2293.42 Crores as on 31st march 2009.

4) The deposit of bank were on its peaks of 1656.60Crs. On 2004-05. It decline on

2005-06 by 2% & again on the rise since 2005-06 and the deposits have increased

by Rs.482.31Crs. during the year and stood at Rs. 2923.31Crs. as on 31st march

2009 as against Rs. 2440.90 Crs.as on 31st march, 2008.

5) The reserve funds and other funds of the bank which amounted to Rs. 458.48

Crs. as on 31st march 2008 & now it increased to 477.23 Crs. as on 31st march

2009.

6) The authorised share capital of the bank is RS. 200.00.The paid up capital of

the bank which was at Rs. 110.93Crs. as on 31st march 2008. Increased and stood

at Rs.122.02 Crores as on 31st march 2009.

7) The investment of bank have increased by Rs. 1068.02 Crs. as on 31 st march

2008 decreased and stood at Rs. 2293.42 Crs. as on 31st march 2009.

8) In STATE BANK OF INDIA Bank the working capital is managed where bills for

collection being bills (As per contra)receivables is deducted from assets and

liabilities side and fixed assets are also deducted from it then we find the

accurate working capial of the bank as shown in annual report of the bank that is

5057.18 which is increasing year by year.

65

mailto:%[email protected]%25

CONCLUSIONS

66

5. CONCLUSIONS

Every business need fund for two purposes- for its establishment and to carry out

its day to day operations. Fund which is needed for the short term period or to

carry out it day to day operations like for purchases of raw material, payment of

wages , etc. are known as It should have neither redundant or excess nor

inadequate or shortage of working capital. The basic goal of working capital

management is to manage the current asset and current liabilities of a firm in

such a way that a satisfactory level of working capital is maintained, i. e. it is

neither inadequate nor excessive.

The requirement for working capital is increasing, by a very merger

amount which the bank is having proper management for it’s working

capital requirement.

The banks has reduced it’s borrowing which it built us it’s own resources.

The bank is mostly serve the agricultural loan to farmers.

The loans & advances of the bank were on the steady rise until 2007-08

but On

2008-09n it has marginally reduced so the loans and advances are on

decline which reflects that the bank is not lending ample amount of money

in the market.

67

RECOMMENDATIONS

68

5. RECOMMENDATIONS

The following suggestions have made for the company to improve the present condition.

It is suggested that the financial manager must be very vigilant in the management of

working capital as it significantly affect the profitability of the firm. An immediate care is

to be given for the working capital management of the firm, as it is on the banks of

closure. Finance manager must consider the variables that affect the profitability of the

firm directly or indirectly and proper attention must be given to control these variables.

The management must control the variables like average payment period days

and average collection period days to reduce its time period of cash conversion cycle.

The management must conduct research studies on their workings and financial

performance at least once in every three financial years. Management must provide

proper training to its finance managers to strengthen their knowledge in managing the

different areas of working capital management like cash management, inventory

management, receivable management and marketable securities management etc. It is

suggested that the companies must give a better presentation of creditors for the

relative period and for the earlier periods separately. (It has found that current years’

purchase is too less but the creditors for suppliers stood at a very large amount. That

looks so frivolous.) Amounts in the reserves and surpluses should be utilized for

productive purposes which will not only increase the earnings of the company but will

also increase the reputation of the company in the market. The companies must

encourage and support the outside scholars who want to conduct research studies on

their companies’ financial performance and other relevant areas of management. Lastly,

it has also suggested the researchers should be provided with proper and relevant

information by the management for research studies. It has often found that the

management hesitates to provide detailed information regarding finance.

The following suggestions have made for the researchers who want to study further

about the working capital management.

It is suggested that comparison of the result of one industry with another similar

industry will help to bring proper conclusions of the study and also it adds effectiveness

69

to the results. A keen probe into the financial parameters of each public sector

undertakings and their difficulties in arranging the working funds will give a clear picture

about the present day condition of the in our state. It is suggested that further research

is to be conducted on the same topic with different companies by extending the years of

the sample study. The scope of further research can be extended to keen areas of

working capital management including cash, marketable securities, receivables and

inventory. A further intense exploration of the variables selected for this research study

can be done to find out the extend of deviations happen in the working capital of any

firm so that the finance managers can be very vigilant in their policies and can exercise a

good control over all those variables which directly or indirectly affect the life of the

firm.

After interpretation and analysis, i am giving certain suggestion to the bank,

which i hope will be helpful for the banks:

(b) The Bank should try to increase it’s proportion of the fixed assets to net

worth.

(c) The proportion of current assets and current liabilities not maintain please

try to maintain it shows our financial position.

(d) The Bank should utilize it’s stock more efficiently.

(e) The Bank should pay attention towards proper and efficient utilization of

working capital.

(f) The Bank should improve it’s sales strategy.

(g) The Bank must increase it’s return.

(h) It should also pay attention in increasing it’s net profit margin, so that it can

survive in adverse condition also.

(i) The Bank should try reducing their expenses, so that the margin of can be

increase.

(j) There is not sitting arrangements for trainees pls try to maintain the facility.

(k) Please maintain the working capital of the bank.

70

BIBLIOGRAPHY

71

BIBLIOGRAPHY

1. Agarwal J.K, Agrawal R.K: Management Accounting: Delhi: Ramesh Book Depo:

8th Edition: 1998

2. Agrawal N.K: Management Accounting of working Capital: Sterling Publishers (P)

Ltd, New Delhi: 1983.

3. Donald Cooper: Business Research Methods: New Delhi: Tata McGraw Hill

Edition: 1998

4. I.M Pandey: Financial Management: New Delhi: Vikas Publishing House (P) Ltd.:

1983

5. James C. Van Horne: Financial Management Policy: Singapore: Pearson

Education Pvt. Ltd.: Twelfth Edition: 1998

6. K.V Smith: Management of Working Capital: New York: West Publishing

Company: 1994

7. Kothari C.R: Research Methodology: Methods and Techniques: New Delhi:

Vishwa Prakashan: 1999

8. Kulshreshtha N.K: Theory & Practice of Management Accounting: Aligarh:

Naveen Prakashan: 1985

9. M.A Sahaf: Management Accounting: Principles and Practices: New Delhi: Vikas

Publishing (p) Ltd: 2005

10. M.L Agrawal: Cost Accounting: Principles and Practice: Delhi: Sahitya Bhavan

72

WEBSITES :

I. www.google.com

II. www.rbi.com

III. www.statebankofindia.com

IV. www.onlinesbi.com

V. www.sbilife.co.in

PAMPLETS OF SBI

73

ANNEXURE

74

ANNEXURE

Consolidated Balance Sheet of State Bank of India

-------------------

in Rs. Cr.

-------------------


12 mths 12 mths 12 mths 12 mths 12 mths

Capital and Liabilities:

Total Share Capital 635 634.88 634.88 631.47 526.3

Equity Share Capital 635 634.88 634.88 631.47 526.3

Share Application Money 0 0 0 0 0

Preference Share Capital 0 0 0 0 0

Init. Contribution Settler 0 0 0 0 0

Preference Share Application

Money 0 0 0 0 0

Employee Stock Opiton 0 0 0 0 0

Reserves 82,836.25 82,500.70 71,755.51 60,604.91 42,009.35

Revaluation Reserves 0 0 0 0 0

Net Worth 83,471.25 83,135.58 72,390.39 61,236.38 42,535.65

Deposits 1,255,562.48 1,116,464.56 1,011,988.33 776,416.52 636,272.88

Borrowings 142,470.77 122,074.57 64,591.64 66,023.17 48,661.83

Total Debt 1,398,033.25 1,238,539.13 1,076,579.97 842,439.69 684,934.71

Minority Interest 2,977.17 2,631.27 2,228.27 2,028.12 1,689.94

Policy Holders Funds 0 0 0 0 0


Other Liabilities & Provisions 163,294.96 125,837.97 153,627.10 121,565.33 86,014.12

Total Liabilities 1,644,799.46 1,447,512.68 1,302,597.46 1,025,241.40 813,484.48

75



Assets

Cash & Balances with RBI 119,349.83 82,195.58 74,161.07 74,817.26 45,066.10

Balance with Banks, Money

at Call 35,977.62 39,653.42 51,100.63 14,211.16 27,410.76

Advances 1,006,401.55 869,501.64 750,362.38 603,221.94 487,285.96

Investments 419,066.45 402,754.13 372,231.45 273,841.72 216,521.05

Gross Block 17,543.26 15,886.95 14,063.96 12,641.08 11,274.90

Accumulated Depreciation 11,402.13 10,359.09 9,127.29 8,224.86 7,425.54

Net Block 6,141.13 5,527.86 4,936.67 4,416.22 3,849.36

Capital Work In Progress 345.7 486.03 286.81 246.57 150.02

Other Assets 60,615.96 50,025.30 51,746.73 56,514.65 34,891.16

Minority Interest 0 0 0 0 0


Total Assets 1,647,898.24 1,450,143.96 1,304,825.74 1,027,269.52 815,174.41

Contingent Liabilities 687,540.57 556,675.30 734,943.70 855,653.79 332,713.98

Bills for collection 234,065.24 197,108.13 175,677.61 115,339.33 86,950.45

Book Value (Rs) 1,314.51 1,309.46 1,140.22 969.74 808.2

Source : Dion Global Solutions Limited

76

State Bank of India

Profit & Loss account

-------------------

in Rs. Cr.

-------------------



Income

Interest Earned 81,394.36 70,993.92 63,788.43 48,950.31 39,491.03

Other Income 14,935.09 14,968.15 12,691.35 9,398.43 7,446.76

Total Income 96,329.45 85,962.07 76,479.78 58,348.74 46,937.79

Expenditure

Interest expended 48,867.96 47,322.48 42,915.29 31,929.08 23,436.82

Employee Cost 14,480.17 12,754.65 9,747.31 7,785.87 7,932.58

Selling and Admin Expenses 12,141.19 7,898.23 5,122.06 4,165.94 3,251.14

Depreciation 990.5 932.66 763.14 679.98 602.39

Miscellaneous Expenses 12,479.30 7,888.00 8,810.75 7,058.75 7,173.55

Preoperative Exp Capitalised 0 0 0 0 0

Operating Expenses 31,430.88 24,941.01 18,123.66 14,609.55 13,251.78

Provisions & Contingencies 8,660.28 4,532.53 6,319.60 5,080.99 5,707.88

Total Expenses 88,959.12 76,796.02 67,358.55 51,619.62 42,396.48



Net Profit for the Year 7,370.35 9,166.05 9,121.23 6,729.12 4,541.31

Extraordionary Items 0 0 0 0 0

Profit brought forward 0.34 0.34 0.34 0.34 0.34

Total 7,370.69 9,166.39 9,121.57 6,729.46 4,541.65

77

Preference Dividend 0 0 0 0 0

Equity Dividend 1,905.00 1,904.65 1,841.15 1,357.66 736.82

Corporate Dividend Tax 246.52 236.76 248.03 165.87 125.22

Per share data (annualised)

Earning Per Share (Rs) 116.07 144.37 143.67 106.56 86.29

Equity Dividend (%) 300 300 290 215 140

Book Value (Rs) 1,023.40 1,038.76 912.73 776.48 594.69

Appropriations

Transfer to Statutory

Reserves 2,488.96 6,495.14 6,725.15 5,205.69 3,682.15

Transfer to Other Reserves 2,729.87 529.5 306.9 -0.1 -2.88

Proposed Dividend/Transfer

to Govt 2,151.52 2,141.41 2,089.18 1,523.53 862.04

Balance c/f to Balance Sheet 0.34 0.34 0.34 0.34 0.34

Total 7,370.69 9,166.39 9,121.57 6,729.46 4,541.65


78

Cash Flow ------------------- in Rs. Cr. -------------------



Net Profit Before Tax 14954.23 13926.10 14180.64 10438.90 7625.08

Net Cash From Operating

Activities34282.52 -1804.99 29479.73 -856.87 -1776.07

Net Cash (used in)/from

Investing Activities-1245.53 -1761.52 -1651.93 -2798.01 -284.56

Net Cash (used in)/from

Financing Activities2057.11 -3359.67 5097.38 19371.12 9494.11

Net (decrease)/increase In

Cash and Cash Equivalents35094.10 -6926.18 32925.18 15716.24 7433.49

Opening Cash & Cash

Equivalents87780.05 103110.02 71478.62 51968.69 44535.20

Closing Cash & Cash

Equivalents122874.15 96183.84 104403.80 67466.34 51968.69


79

State Bank of India

Capital Structure

Period Instrument --- CAPITAL (Rs. cr) --- - P A I D U P -

From To Authorised Issued Shares (nos) Face Value Capital

2010 2011 Equity Share 5000 635.08 634998991 10 635

2009 2010 Equity Share 1000 634.97 634882644 10 634.88

2008 2009 Equity Share 1000 634.97 634880222 10 634.88

2007 2008 Equity Share 1000 631.56 631470376 10 631.47

2006 2007 Equity Share 1000 526.3 526298878 10 526.3

2005 2006 Equity Share 1000 526.3 526298878 10 526.3

2004 2005 Equity Share 1000 526.3 526298878 10 526.3

2003 2004 Equity Share 1000 526.3 526298878 10 526.3

2002 2003 Equity Share 1000 526.3 526298878 10 526.3

2001 2002 Equity Share 1000 526.3 526298878 10 526.3

2000 2001 Equity Share 1000 526.3 526298878 10 526.3

1999 2000 Equity Share 1000 526.3 526298878 10 526.3

1996 2000 Equity Share 1000 526.3 526298878 10 526.3

1995 1996 Equity Share 1000 474.01 474009872 10 474.01

1994 1995 Equity Share 1000 474.01 474009189 10 474.01

1993 1994 Equity Share 1000 473.83 473828726 10 473.83

1991 1993 Equity Share 1000 200 20000000 100 200

Source : Asian CERC

80

State Bank of India

Key Financial Ratios


Investment Valuation Ratios

Face Value 10.00 10.00 10.00 10.00 10.00

Dividend Per Share 30.00 30.00 29.00 21.50 14.00

Operating Profit Per Share (Rs)255.39 229.63 230.04 173.61 147.72

Net Operating Profit Per Share

(Rs)1,504.34 1,353.15 1,179.45 899.83 833.38

Free Reserves Per Share (Rs) 468.29 412.36 373.99 356.61 184.43

Bonus in Equity Capital -- -- -- -- --

Profitability Ratios

Interest Spread 4.12 3.82 4.34 4.32 4.20

Adjusted Cash Margin(%) 9.60 11.62 13.04 12.81 11.43

Net Profit Margin 8.55 10.54 12.03 11.65 10.12

Return on Long Term Fund(%) 96.72 95.02 100.35 86.83 99.20

Return on Net Worth(%) 12.71 13.89 15.74 13.72 14.50

Adjusted Return on Net

Worth(%)12.74 13.91 15.74 13.70 14.47

Return on Assets Excluding

Revaluations1,023.40 1,038.76 912.73 776.48 594.69

Return on Assets Including

Revaluations1,023.40 1,038.76 912.73 776.48 594.69

Management Efficiency Ratios

Interest Income / Total Funds 8.39 8.52 8.88 8.82 8.27

Net Interest Income / Total

Funds4.10 3.82 3.79 3.87 3.85

81

Non Interest Income / Total

Funds0.09 0.10 0.11 0.14 0.19

Interest Expended / Total

Funds4.29 4.69 5.09 4.96 4.42

Operating Expense / Total

Funds2.67 2.38 2.06 2.16 2.39

Profit Before Provisions / Total

Funds1.43 1.46 1.75 1.74 1.54

Net Profit / Total Funds 0.65 0.91 1.08 1.04 0.86

Loans Turnover 0.14 0.15 0.16 0.15 0.15

Total Income / Capital

Employed(%)8.48 8.62 8.99 8.96 8.46

Interest Expended / Capital

Employed(%)4.29 4.69 5.09 4.96 4.42

Total Assets Turnover Ratios 0.08 0.09 0.09 0.09 0.08

Asset Turnover Ratio 7.24 7.26 7.20 6.32 5.44

Profit And Loss Account Ratios

Interest Expended / Interest

Earned60.04 66.66 67.28 65.23 59.35

Other Income / Total Income 1.10 1.21 1.18 1.56 2.25

Operating Expense / Total

Income31.51 27.61 22.91 24.13 28.19

Selling Distribution Cost

Composition0.26 0.26 0.33 0.30 0.20

Balance Sheet Ratios

Capital Adequacy Ratio 11.98 13.39 14.25 13.47 12.34

Advances / Loans Funds(%) 77.19 74.22 78.34 78.31 76.16

Debt Coverage Ratios

Credit Deposit Ratio 79.90 75.96 74.97 77.51 73.44

Investment Deposit Ratio 33.45 36.33 36.38 34.81 38.22

Cash Deposit Ratio 8.96 7.56 8.37 8.29 6.22

Total Debt to Owners Fund 14.37 12.19 12.81 10.96 13.92

82

Financial Charges Coverage

Ratio0.35 0.33 1.36 1.37 1.37

Financial Charges Coverage

Ratio Post Tax1.19 1.21 1.23 1.23 1.22

Leverage Ratios

Current Ratio 0.04 0.04 0.04 0.07 0.05

Quick Ratio 8.50 9.07 5.74 6.15 6.52

Cash Flow Indicator Ratios

Dividend Payout Ratio Net

Profit26.03 23.36 22.90 22.64 18.98

Dividend Payout Ratio Cash

Profit23.24 21.20 21.13 20.56 16.75

Earning Retention Ratio 74.03 76.67 77.11 77.33 80.97

Cash Earning Retention Ratio 76.80 78.82 78.88 79.41 83.21

AdjustedCash Flow Times 100.71 79.54 75.05 72.64 84.87


Earnings Per Share 116.07 144.37 143.67 106.56 86.29

Book Value 1,023.40 1,038.76 912.73 776.48 594.69


83

Project Report on SBI

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