Finance is the life blood of business. It is rightly termed as the science of money. Finance is very essential for the smooth running of the business. Finance controls the policies, activities and decisions of every business.
DEFINITION:
"FINANCE is that business activity which is concerned with the organization and conversion of capital funds in meeting financial needs and overall objectives of a business enterprise"
-Wheeler
Finance is one of the major elements, which activates the overall growth of the economy. Finance is the lifeblood of economic activity. A well knit financial system directly contributes to the growth of the economy. An efficient financial system calls for the effective performance of financial institutions, financial instruments and financial markets.
FINANCIAL ANALYSIS
Any business is mainly concerned with the financial activities. In order to ascertain the financial status, every enterprise prepares certain statements, known as financial statements. Financial statements are mainly prepared for decision making purposes, but the information provided in the financial statements is not adequately helpful in drawing a meaningful conclusion. Thus, an effective analysis and interpretation is required.
Financial analysis refers to establishing a meaningful relationship between various items of the two financial statements with each other by drawing conclusions. Financial statements are of two types:
Profit and loss account or Income Statement
Balance Sheet or Position Statement
The term financial analysis and interpretation of financial statements refers to establishing meaningful relationship between various items of the two financial statements (profit & loss and balance sheet). It determines the financial strengths and weaknesses of the firm.
Analysis of financial statements is an attempt to assess the efficiency and performance of an enterprise. Thus, the analysis and interpretation of financial statements is very essential to measure the efficiency, profitability, financial soundness and future prospects of the business units. Financial analysis serves the following purposes:
Measuring the profitability
Indicating the trend of achievements
Assessing the growth potential of business
Comparative position in relation to other firms
Research Design
A Research Design is a logical and systematic plan prepared for directing a research study. It specifies the objectives of the study, the methodology and the techniques to be adopted for achieving the objectives. It constitutes the blueprint for the collection, measurement and analysis of data. It is "the plan, structure, and strategy of investigation conceived so as to obtain answers to research questions." A research design is the program that guides the investigator in the process of collecting, analyzing and interpreting observation. It provides a systematic plan of procedure for the researcher to follow. It is indispensable for a research project.
STATEMENT OF PROBLEM:
Banks contribute to the economic development of the country. The current study has been undertaken to analyze the financial strength and stability of State Bank of Mysore, to suggest remedies wherever possible, so as to set the bank's progress on the right path and to see if it is able to achieve its objectives. This analysis is also critical and essential to study. This will provide direct benefit to the company.
OBJECTIVES OF THE STUDY:
To study the financial performance of the bank.
To study the trends in the previous four years.
To find out the profitability of the Bank. data for this from the bank
To provide appropriate solutions to problems that exists.
SCOPE OF THE STUDY:
This study is conducted at State Bank of Mysore, Bangalore. The current study is conducted with the help of published annual reports of the bank of the years 2008-2012. The study gives an idea about the present financial position of the bank.
HYPOTHESIS TESTING:
OPERATIONAL DEFINITIONS:
METHODOLOGY OF STUDY:
Review of Literature
Purpose
In this project work secondary data are used as a basis of analysis. In this study the financial performance of State Bank of Mysore, only past financial statements like Balance Sheet is studied. The current study has been undertaken to analyze the functioning and financial performance of the bank over the past years and suggest remedies wherever possible so as to set the banks progress on the right path and to see if it is able to achieve its objectives.
Method of Review
In this project the method used was the 4 year annual report of State Bank of Mysore to analyze the trends in the previous years. In order to get the information regarding the bank and its operations, internet was used. The bank's web address also helped to collect information regarding the country wide operations.
Benefits of the Literature
It facilitates to know types of secondary data, advantages of secondary data.
It also helps to know the following:
Topic on which similar research has been done
Purpose of the earlier similar research
Conclusion derived from the earlier research
It facilitates to know how this research is different from the earlier one
Helped in making this research more specific and precise thereby enabling to analyze the problem systematically.
Data Collection Method
The sources of data in this study are basically secondary in nature. Secondary data published by State Bank of Mysore is used for the study. Secondary data was collected from annual reports, other brochures and website of the bank.
Reference Period
A Reference Period of four years has been taken for the analysis i.e., 2008-2009, 2009-2010, 2010-2011, and 2011-2012. By conducting an analysis on a 4 year span, it provides a wider coverage on the operations of the bank and techniques can be brought about in a more effective manner.
SAMPLING PLAN AND SAMPLE SIZE:
This will not apply for the study as it is a finance topic, more dependent on secondary data.
PLAN OF ANALYISIS:
Techniques Used
Trend Analysis
Comparative statements
LIMITATIONS OF THE STUDY:
The study is limited to banking sector.
Time period is one of the limitations of the study.
Secondary data is used mainly for the study. Therefore, the limitations of secondary data are applicable to this study as well.
The study is limited to the financial performance of State Bank of Mysore.
The research was conducted to get an overall view of the firm; as such it was not possible to probe deep into the subject.
CHAPTER SCHEME:
INTRODUCTION - This chapter mentions about information on the Industry - Bank and the Subject - Finance.
RESEARCH STUDY - This chapter contains the blue print of the entire project. Research Design is the arrangement of conditions for the collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. It includes all the 10 steps in research design. Introduction, statement of problem, objectives of the study, scope of the study, hypothesis, operational definitions, methodology and sources of data, sampling design, plan of analysis and tools for collection of data, limitations of the study, overview of chapter scheme.
COMPANY PROFILE - This chapter includes an overview of the company - Origin and development, products and services, competitors, organizational structure.
DATA ANALYSIS AND INTERPRETATION - This chapter includes the comparative trend analysis made from the secondary data obtained from the company such as the company guide and brochures. With the help of tables and graphs, interpretations were made. Tables and graphs of capital, reserves & surplus, deposits, borrowings, other liabilities & provisions, total liabilities, cash & balance with RBI, balances with bank & money at call, investments, advances, fixed assets, other assets, total assets, contingent liability, bills for collection, equity paid up, net worth, capital employed, sales, PBT, PAT, EPS, dividend.
FINDINGS, SUGGESTIONS AND CONCLUSION - This is the last chapter in the research project which contains summary of findings for the study. Based on the analysis and interpretation, conclusions and suggestions are finally given by the researcher in this chapter.
