Gokhale Education Society’s

B.Y.K. College of Commerce

Prin. T. A. Kulkarni Vidyanagar, Nashik – 5.

‘NAAC’ Accredited with Grade ‘A’

ISO 9001-2015 Certified College

Name of the Student: - Anas Ayaz Kazi

TYBBA (Finance)

Roll No: - 73

Subject Teacher:-
(Mrs. RAMA D. YADAV)

1
Gokhale Education Society’s

B.Y.K. College of Commerce

Prin. T. A. Kulkarni Vidyanagar, Nashik – 5.
‘NAAC’ Accredited with Grade ‘A’ ISO
9001-2015 Certified College

Certificate
This is to certify that Master. Anas Ayaz Kazi of TYBBA, Roll No.73 has

undertaken and completed a Project under the subject Analysis of Financial

Statements as required by the rules of Savitribai Phule Pune University for the year

2022-2023.

Date: Project Guide

(Mrs. Rama D. Yadav)

2
INDEX
Sr.No Company Name Topic Signature of
Teacher
1. NAMCO Bank Financial Analysis of
any company using three
years using Trend
percentage/Comparative
Statement/Ratio
Analysis.
2. Rehbar Enterprises Financial Analysis of
And Star two different companies
Enterprises using Trend
Percentage/Comparative
Statement/Ratio
Analysis

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CONTENTS

• Introduction on Financial Statement.

• About NAMCO bank ltd.
• Objectives of the Study.
• Interpretation of Financial statement.
• Balance Sheet of three years of NAMCO Bank
• Calculation using Comparative Statement, Trend Percentage and Ratio
Analysis.
• Conclusion.

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INTRODUCTION

Financial Statements are statements that serve as a means of communication between the
organization and different users of financial statements regarding the financial position and
profitability of the business at the end of a financial year. The financial statements of an
organization also help them in different analyses, such as Credit Analysis, Debt Analysis,
Security Analysis, and General Business Analysis. To ensure the reliability and accuracy of the
financial statements, firms, accountants, government agencies, etc., audits the statements.
Financial analysis is the process of examining a company’s performance in the context of its
industry and economic environment in order to arrive at a decision or recommendation. Often,
the decisions and recommendations addressed by financial analysts pertain to providing capital
to companies—specifically, whether to invest in the company’s debt or equity securities and at
what price. An investor in debt securities is concerned about the company’s ability to pay
interest and to repay the principal lent.

The financial statements are used by investors, market analysts, and creditors to evaluate a
company's financial health and earnings potential. The three major financial statement reports
are the balance sheet, income statement, and statement of cash flows.

Balance sheet : The balance sheet provides an overview of assets, liabilities, and shareholders'
equity as a snapshot in time.

Income statement: The income statement primarily focuses on a company’s revenues and
expenses during a particular period.

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Introduction on NAMCO Bank
When we look at the history of banking approximately 57 years ago, it is very difficult
to get finance from banks not only in Nasik but the other parts of the Maharashtra for
a common man or a small industrialist or a small merchant for their true needs.
In those days Banks policy was to collection of deposits from the rural areas and
Distribute these deposits as a loan to specific industries as loan and to collect more
and more profits from it in the name of secured banking. So the actual needy people
are not getting the benefits of banking from such policies.
To break this tradition, some prominent and hard working social activists came
together to remove such barricades between a common and needy people and the
Bank, and so "NAMCO", as it is popularly called, took birth on 11 June 1959 on a
auspicious day of Nagpanchami, in house no.99,Gaidhani Wada, at auspicious
hands of Principle S.G.Puranik. Other enthusiast social workers like late Visukaka
Kshatriya, late Dadasaheb Potnis, Mamasaheb Shukla, Prabhakarpant Modak,
Gopalrao Pathak, Annasaheb Kulkarni, M.S.Aurangabadkar, BabubhaiRathi,
G.V.Ashtaputre, Narayan Vaishya and many other social workers gave an excellent
contribution .It is very difficult journey from 1959 to 1975 to emerge as a bank for the
common man.
Some Glorious Achievements :

 Certified as a Sheduled Bank from RBI in 22 April 1996

 Certified as a Multistate Sheduled Bank from RBI in 25 Oct.2000
 Working areas : Maharashtra, Gujrat, Andhrapradesh

Branches :Inculding Administrative Office total Branches 81

 In Nasik District 63 Branches

 In Maharashtra 16 branches

Out of state 2 Branches

In the new edge of technology, there are vast customer services options to provide
better banking solutions. In India's 500 topmost software companies, 25% software
companies are in our Maharastra as well as 40% people using internet. In a such
situation the computerized banking concept is not only limited for the cosmopolitan
cities but it started on the rural areas too. So reach more and more customers and
provide them the fastest way of services, the Bank moves towards the Core Banking
Solutions. And successfully completed his core banking solutions and implemented
for all branches in March 2007. Because the strong technology base bank is always
ahead in banking.
To improve the strength of staff and officers bank arranges time to time training
schedules for the advance banking and better customer care. In the results we proud
to say that The Nasik Merchants C0-Op bank Ltd., is the first bank having his own
data centre with Core Banking solutions in North Maharashtra.

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OBJECTIVES OF THE STUDY

1. To help in providing a part of information needed in the process of decision-making.

2. To Focus on facts on a comparative basis and facilitate drawing of conclusions relating to

the performance of a firm.

3. To provide the way for effective control of the enterprise in the matter of achieving the
physical and monetary targets.

4. To Help the management in discharging its’ basic functions like forecasting, planning
coordination, communication, control etc.

5. To evaluate the performances of a firm in determining the important aspects of a business

such as liquidity, solvency, operational efficiency, overall profitability, capital gearing etc.

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BALANCE SHEET OF NAMCO BANK LTD YEAR 2018-19

Liabilities Amount Assets Amount

Current liability Cash and cash 968900
equivalent
Accounts payable 1044000 Short term investment 360700

Short/current long term 1600 Net receivable 1123700

Other current liability - Inventory 865600

Total current liability 1045600 Other current assets 133300

Long term debt 2654600 Total current assets 3452200

Other liability 347800 Long term investment -

Deferred long term Property & 590700
liability plant
investment
Minority interest 30500 Goodwill 2616700

Total liability 4078500 Intangible assets 326300

Stockholders equity - Accumulated

amortization
Common stock 300 Other assets -

Capital surplus 659400 Deferred long term -

assets charges
Retained earning 2453500

Treasury stock -
Other equity (205800)
Total equity 2907400

Total 6985900 Total 6985900

8
BALANCE SHEET OF NAMCO BANK LTD YEAR 2019-20

Liabilities Amount Assets Amount

Current liability Cash and cash 1737200
equivalent
Accounts payable 1008100 Short term 23200
investment
Short/current long 200 Net receivable 1104600
term
Other current - Inventory 851800
liability
Total current 1008400 Other current asset 133200
liability
Long term debt 2813200 Total current asset 3850000

Other liability 358400 Long term -

investment
Deferred long term - Property plant & 609500
liability charges equipment
Minority interest 39900 Goodwill 2692900

Total liability 4219900 Intangible assets 306000

Stockholders equity Accumulated -

amortisation
Common stock 300 Other assets -
Capital surplus 783300 Deferred long term -
assets charges
Retained earnings 2804400

Treasury stock -
Other equity (349500)

Total equity 3238500

Total 7458400 Total 7458400

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BALANCE SHEET OF NAMCO BANK LTD YEAR 2020-21

Liabilities Amount Assets Amount

Current liability Cash and cash 1034600
equivalent
Accounts payable 1260000 Short term 138600
investment
Short/current long 375200 Net receivable 1349300
term
Other current - Inventory 928900
liability
Total current 1635200 Other current assets 139800
liability
Long term debt 2635500 Total current asset 3591200
Other liability 504900 Long term -
investment
Deferred long term - Property plant & 711400
liability charges equipment
Minority interest 42800 Goodwill 3678800

Total liability 4823800 Intangible assets 517300

Stockholders equity Accumulated -

amortisation
Common stock 300 Other assets -

Capital surplus 1020900 Deferred long term -

assets charges
Retained earnings 3122700
Treasury stock -
Other equity (469000)
Total equity 3674900

Total 8498700 Total 8498700

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COMPARATIVE STATEMENT ANALYSIS 2018-19

Assets 2018 2019 Absolute Percentage

change change

Cash and 968900 1737200 -768300 79%

investment
Short term 360700 23200 337500 6.53%
investment
Net receivable 1123700 1104600 19100 1.72%

Plant & 590700 609500 -18800 3.18%

equipment
Goodwill 2616700 2692900 -76200 3%

Intangibles 326300 306000 20300 7%

Other current 3452800 133200 3319600 128%
Assets
Total 94,39,800 66,06,600 2833200 42%

Liabilities 2018 2019 Absolute Percentage

change change
Accounts Payable 1044000 1008100 35900 3.5%

Retained earning 2453500 2804400 -350900 14.3%

Total current 1045600 1008400 37200 4%

liabilities

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Comparative Balance sheet 2020-21
Assets 2019 2020 Absolute Percentage
change change
Cash and 1737200 1034600 702600 67%
investment
Short term 23200 138600 -115400 140%
investment
Net 1104600 1349300 -244700 22%
receivable
Plant & 609500 711400 -101900 17%
equipment
Goodwill 2692900 3678800 -985900 36%
Intangibles 306000 517300 211300 69%
Other current 133200 139800 -6600 5%
Assets
Total 66,06,600 7569800 -963200 15%

Liabilities 2019 2020 Absolute Percentage

change change
Accounts Payable 1008100 1260000 -251900 24%

Retained earning 2804400 3122700 318300 11%

Total current 3812500 4382700 570200 15%

liabilities

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Statement of Trends of Various Items Of NAMCO Bank LTD

Items Trend%2018 Trend%2019 Trend%2020

Cash and 100 179 106
equivalent

Short term 100 6.43 38

investment
Accounts 100 98 120
receivable
Plant & 100 103 120
equipment
Goodwill 100 102 140

Intangibles 100 93 158

Other current 100 3.85 4

asset

Accounts Payable 100 96 120

Retained earning 100 114 127

Current liabilities 100 96 156

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Ratio Analysis

1) Current assets:

Formula
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡
Current ratio=
Current liabilities
1) Year 2018-19
= 3452200 / 1045600
= 3.3 : 1
2) Year 2019-20
= 3850000 /1008400
= 3.8 : 1
3) Year 2020-21
= 3591200 /1635200 =21:1

2) Liquidity ratio :
. Liquidity ratio is expressed as a number instead of a percentage.

Formula = Liquid assets

Liquid liability

1) Year 2018-19

Liquid assets = current asset – inventory

= 3452200 – 865600

= 2586600

Liquid liability = current liability = 1045600

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So, =2586600
1045600
= 2.4 : 1
2) Year 2019-20
Liquid asset = current asset – inventory

= 3850000 - 851800

= 2998200

Liquid liability = current liability = 1008400

= 2998200
1008400
= 2.9 : 1

3) Year 2020-21

Liquid asset = current asset – inventory

= 3591200 - 928900

= 2662300

= current liability = 1635200

Liquid liability
So ,
= 2662300
1635200
= 1.6 : 1

15
Leverage / solvency ratio

1) Proprietary ratio :

Formula = proprietary fund

Total assets

1) Year 2018-19

Proprietary fund = capital surplus

= 659400

Total assets = fixed asset & current assets - goodwill

= 6985900 - 2616700

= 4369200
So , = 659400
4639200 = 0.1 : 1

2) Year 2019-20
Proprietary fund = capital surplus
= 783300

Total assets = fixed asset & current assets - goodwill

= 7458400 - 2692900

= 4765500

So , = 783300
4765500 = 0.1 : 1
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3) Year 2020-21
Proprietary fund = capital surplus

= 1020900

Total assets = fixed asset & current assets - goodwill

= 8498700 - 3678800
= 4819900

So, = 1020900
4819900
= 0.2 : 1

2) Debt equity ratio :

Formula = total debt (long term and short term )

Owner’s equity/ shareholder fund

1) Year 2018-19
Total debt = long term + short term

= 2654600 + 1600

= 2656200

Shareholder fund = capital surplus

= 659400

So, = 2656200
659400
= 4.0 : 1

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2)Year 2019-20

Total debt = long term + short

term

= 2813200 + 200

= 2813400

Shareholder fund = capital surplus

= 783300

So , = 2813400
783300
= 3.5 : 1

3)Year 2020-21

Total debt = long term + short

term

= 2635500 + 375200

= 3010700

Shareholder fund = capital surplus

= 1020900

So, = 3010700
1020900

= 2.9 : 1

18
Profitability ratio

1) Gross profit :
Gross profit ratio (GP ratio

Formula = gross profit ₓ 100

Sales

1) Year 2018-19

= 40000 ₓ 100

1340000
= 2.9 %

2) Year 2019-20

= 50000 ₓ 100
1100000
= 4.5 %

3) Year 2020-21
= 30000 ₓ 100
1021000
= 2.9 %
Activity turnover ratio

1) Total assets turnover ratio :

Formula
sales Total
asset

1) Year 2018-19
= 1340000
6985900

19
= 0.1 : 1
2) Year 2019-20
= 1100000
7458400
= 0.1 : 1

3) Year 2020-21

= 1021000
8498700

= 0.1 : 1

2) Inventory turnover ratio :

.

Formula = COGS
Avg. stock

1) Year 2018-19
COGS = sales - gross profit

= 1340000 – 40000
= 1300000

Average stock = 865600

= 1.5 : 1

2) Year 2019-20
COGS = sales - gross profit

20
= 1100000 – 50000

= 1050000

Average stock = 851800

So, = 1050000
851800

= 1.2 : 1
3) Year 2020-21
COGS = sales - gross profit

= 1021000 – 30000

= 991000

Average stock = 928900

So , = 991000
928900

= 1.0 : 1

2) Sales to working capital ratio (w.c) :

Formula = sales
w. c

1) Year 2018-19

Sales = 1340000

w.c = current assets – current liability

= 3452200 – 1045600
21
= 2406600

So, = 1340000
2406600
= 0.5 : 1
2) Year 2019-20
Sales = 1100000

w.c = current assets – current liability

= 3850000 - 1008400

= 2841600

= 1100000
2841600

= 0.3 : 1

3) Year 2020-21
Sales = 1021000

w.c = current assets – current liability

= 3591200 – 1635200

= 1956000
So, = 1021000
1956000
= 0.5 : 1

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CONCLUSIONS
According to this project financial statements it is clear that NAMCO bank.
Have been incurring loss during the period of study.

1) A very high current ratio may not indicate very favourable ratio because it means
that excessive investment in current asset . So in Year 2018-19 Bank situations is
good.

2) Bank liquidity position is overall good.

3) The comparative study of last 3 years ratio of Bank shows that the Bank overall
financial performance is well .

4) As per gross profit ratio, although the Bank has increase sales turnover and grow
its profitability due to decrease in material cost.

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TOPIC 2
FINANCIAL ANALYSIS OF TWO DIFFERENT
COMPANIES
REHBAR ENTERPRISES &
STAR ENTERPRISES

Contents
 Introduction.
 Comparison Of Balance sheet.
 Comparative Statement, Trend Percentage, Ratio Analysis.
 Conclusion.

24
INTRODUCTION

A project may also be define as a scientifically evolved work plan devised to

achieve a specific objective within a specific period of time. The objective may
be to create , expand and develop certain facilities in order to increase the
production of goods and services in the community A project is a scientific and
systematic study of real issue or a problem intended to resolve the problem with
the application of commerce and management concepts and skills. The study
can deal with a small or big issue in or in an The project is an economic activity
with well defined objectives and division of organisation.
1. Identification of a small research problem. 2. Formulation of a hypothesis. 3.
Design of the project work to test the widely used tool for financial analysis.

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BALANCE SHEET OF REHBAR & STAR ENTERPRISES

Liabilities Rehbar Star enterprises

enterprisess 2020 2021
Equity share capital 230000 140000

Reserve surplus 155000 590000

Secured loan 360000 380000

Current liabilities 425000 34000

total 1170000 1144000

ASSEST

Fixed assets 670000 700000

Investment 32000 78000

Stock 300000 250000

Debtors 60000 100000

Other current asset 1065000 1128000

2127000
Total 1931000

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COMPARATIVE BALANCE SHEET

Particulars 2019 2020 Absolute Percentage

Rehbar Star change Change
enterprises enterprises

Liabilities
Equity share 230000 140000 90000 64%
capital
Reserve 155000 590000 -435000 28%
surplus
Long term 360000 380000 20000 5%
borrowing

Current 425000 34000 391000 11%

liabilities

Total 1170000 1144000 1027000 89%

Assets

Fixed assets 500000 700000 200000 40%

Non current 20000 50000 30000 150%

investments
Inventors 300000 200000 -100000 -33.33%

Trade 50000 20000 -30000 -60%

receivable
Other current 30000 30000 Nil Nil
assets
Total 900000 1000000 100000 11.11%

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TREND PERCENTAGE

Particulars 2020 2021 Trend

Rehbar Star percentage
Enterprises Enterprises
Liabilities
Equity share 250000 400000 160%
capital
Reserve surplus 125000 200000 160%

Long term 250000 350000 140%

borrowing
Current liabilities 2750000 50000 18.18%

Total 900000 1000000 111%

Assets
Fixed assets 500000 700000 140%
Non current 20000 50000 250%
investments
Inventors 300000 200000 66%
Trade receivable 50000 20000 40%

Other current 30000 30000 100%

assets
Total 900000 1000000 111%

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RATIO ANALYSIS

2020 2021
Rehbar Star
enterprises enterprises
1 . current ratio 400000 300000
Current assets
275000 50000
Current liabilities
= 1.45:1 = 6:1
2500000 350000
2 debt equity ratio Long
debt term 3750000 600000

Shareholder fund =0.6:1 =0.58:1

375000 600000
3 propertiory ratio
Shareholder fund 900000 1000000

Total assets =0.41:1 =0.6:1

400000 300000
4 current asset to fixed assets
Current assets 500000 700000

Fixed assets = 0.8:1 =0.42:1

300000 250000
5 stock to working capital
stock 125000 200000

w/c ( ca- cl) =2.4:1 =1.25:1

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Conclusion

Financial analysis determines a company’s health and stability, providing an understanding

of how the company conducts its business. But it is important to know that financial
statement analysis has its limitations as well. Different accounting methods adopted by
different firms’ changes the visible health and profit levels for either better or worse.
Different analysts may get different results from the same information. Hence, we must
conclude that financial statement analysis is only one of the tools (although a major one)
while taking an investment decision.

It given opportunity to apply theoretical knowledge obtained from the collage in a practical
manner in the actual business world. Also it gives information about world.. also it gives
information about objectives and limitations of project work. Secondary data has been used
for the project work. It includes profit and project work. It includes profit and loss statement
and balance sheet of three consecutive financial years.

30