Finiancial Ratos of Canara Bank

7/29/2019 Finiancial Ratos of Canara Bank

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GROUP 1


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NAME ROLLNUMBERS

SYNAICA AGUIAR

ANTO LIBIN

SHAUN DSOUSA

GLENNA DSILVA

ROYSTON LEWIS

JULIANA MACWAN

JOEL MONTERO

BREEZY PEREIRA

CRYSAN PEREIRA

8201

8202

8215

8211

8223

8226

8230

8239

8240


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Canara Bank was founded by Shri Ammembal SubbaRao Pai, in July 1906,.Growth of Canara Bank wasphenomenal, especially after nationalization in theyear 1969, In June 2006, the Bank completed acentury of operation in the Indian banking industry..

Today, Canara Bank occupies a premier position inthe comity of Indian banks. With an unbroken recordof profits since its inception, Canara Bank has severalfirsts to its credit. These include:

Launching of Inter-City ATM Network Obtaining ISO Certification for a Branch

Issuing credit card for farmers


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Meaning FORMULA:

Proprietary Ratio=Shareholders Funds x 100Total Assets


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= 2011 = 20039.82 x 100336078.76

= 5.96%

2012 = 22689.96 x 100

374160.20

= 6.06%

REASON


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Difference between the proprietors funds =22689.96 2039.82

=2650.14

Therefore % increase = 2650.14 x 10020039.82

= 13.22%


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Difference between total assets = 374160.20 336078.76

= 38081.44

Therefore % increase = 38081.44 x 100336078.76

= 11.33%

REASON


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Formula:ROI = PBIT (Profit before interest after tax)

Capital employed

ROI of Canara bank for the year 2012 is15.91% & for the previous year 22.43%

There is an increase in the ROI of the bank.


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Definition of 'Dividend Payout Ratio' The percentage of earnings paid to

shareholders in dividends.Calculated as

Dividend payoutratio

2012 2011

82.72 85.91


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FORMULA:

RETURN ON CAPITALEMPLOYED

9.52 8.62


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Definition Of Gross Profit ratio

Gross profit ratio is the ratio of gross profit tonet sales expressed as a percentage. it expresses

the relationship between gross profit and sales.

Formula:Gross profit ratio =gross profit x 100

net sales


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Canara bank has total sales of Rs 5200000 and the salesreturn=20000 Rs; cost of goods sold is Rs 400000.

Solution:

Gross profit={(520000-20000)-400000} =100000.gross profit ratio=100000 x100

500000

=20%

Comment: Gross profit ratio is indicated to what extent theselling prices of goods per unit may be reduced withoutincurring losses on operations as the gross profit is foundby deducting cost of goods sold from net sales, higher theprofit better it is.However the gross profit earned should be sufficient to

recover all operating expense and to build up reserves afterpaying all fixed interest charges and expenses.Every year the gross profit changes due to increase ordecrease in the ratio.


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may be defined as therelationship between current assets andcurrent liabilities.

Current Ratio= Current Assets / CurrentLiabilities

Or

Current Assets: Current Liabilities

CURRENT RATIO 0.3 0.4


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:-

1) Net Sales increase by 33.76%2) Fixed Assets decrease by 93.82%

FIXED ASSETTURNOVER

1383.56 29952.05


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Net Profit ratio is a test of profitability inManagement Efficiency.

It shows the relationship between NetProfitability to Sales.

It depends upon the nature of the industry.


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NET PROFIT RATIO = NET PROFIT(Before Tax)TOTAL FUNDS

2011 5025.89 25767.05 0.2

2012 4082.72 33778.22 0.12


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Earnings per share is generally considered to bethe single most important variable in determininga share's price. It is also a major component usedto calculate the price-to-earnings valuationratio.

The portion of a company's profit allocated toeach outstanding share of commonstock. Earnings per share serves as an indicatorof a company's profitability.

FORMULA:- NPAT- PREFERNCE DIVIDEND

NO OF EQUITY SHARES

74.10 90.88


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:

Operating expense

ratio = Operating Expense x 100

Net sales


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2011 = 1622.60 x 100

7812.08

= 20.76%

2012 = 1780.33 x 100

8267.49

= 21.54%


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Difference between the operating expenses =

1780.33 1622.06

= 158.27

Therefore % increase = 158.27 x 100

1622.60

= 9.75%


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Difference between the net sales= 8267.49 7812.08

=455.41

Therefore % increase = 455.41 x 100

7812.08

= 5.82%

REASON


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The total asset turnover ratio measures the abilityof a company to use its assets to efficientlygenerate sales. This ratio considers all assets,current and fixed. Those assets include fixed

assets, like plant and equipment, as wellas inventory, accounts receivable, as well as anyother current assets.

FORMULA:

Total asset turnover ratio

2o12 2011

0.09 0.08
http://bizfinance.about.com/od/financialratios/f/Fixed_Asset_Turnover.htmhttp://bizfinance.about.com/od/financialratios/f/Fixed_Asset_Turnover.htmhttp://bizfinance.about.com/od/financialratios/f/Inventory_Turnover_Ratio.htmhttp://bizfinance.about.com/od/financialratios/f/Avg_Collection_Period.htmhttp://bizfinance.about.com/od/financialratios/f/Avg_Collection_Period.htmhttp://bizfinance.about.com/od/financialratios/f/Inventory_Turnover_Ratio.htmhttp://bizfinance.about.com/od/financialratios/f/Fixed_Asset_Turnover.htmhttp://bizfinance.about.com/od/financialratios/f/Fixed_Asset_Turnover.htm


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Formula:BVPS = Equity share capital+ Reserves &

surplus

No. of Equity shares

The Book value of the Canara bank in the year2012 is 465.57 & for the previous year it is

405.00


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Creditors turnover ratio (also known as Accountspayable turnover ratio )is calculated by taking the total purchasesmade and dividing it by the average accounts payables during theperiod. it is used to measure the rate at which a firm pays off itssupplier.

Creditors turnover ratio= credit purchasesaverage trade creditors

Accounts payable turnover(APT) ratio= cost of goods soldaccounts payable

Canara bank has total cost of production of Rs 260000 and totalshort term credits is 130000.Solution260000 = 2 times .130000


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Creditors velocity = 365/creditors turnover ratio=365

2=182.5

=183 days approximately.

Comment: According to Creditors turnover ratio to calculatewe know that lower the creditors turnover ratio better it is tomeet the creditors quickly.Then to calculate the creditors velocity ratio is to know the

payment policy .higher the ratio that is the bank is in a goodposition in the market and has a longer than usual time topay its creditors.


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Meaning Formula :- Operating Profit

--------------------- X 100

Net Sales

Observation :- 1) Operating Profit increase by

38.4% 2) Net Sales increase by 33.76%

Reasons

76.15% 78.81%


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This ratio relates the fixed interest charges tothe income earned by the business.

Interest Coverage Ratio = Net Profit beforeInterest and Tax / Fixed Interest Charges

INTERESTCOVERAGE RATIO

15.86 16.39


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Dividend per share (DPS) is the total dividends paid outover an entire year divided by the number of outstanding ordinary shares

issued Dividends are a form of profit distribution to the

shareholder. Having a growing dividend per share canbe a sign that the company's management believes thatthe growth can be sustained

FORMULA:-TOTAL EQUITY DIVIDEND DECLARED

NO. OF EQUITY SHARES

11 11


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Definition of 'Debt-To-Capital Ratio' A measurement of a company's financial

leverage, calculated as the company's debtdivided by its total capital.

Calculated as:

TOTAL DEBT TOOWNERS FUND

15.86 16.39


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Earning retention ratio signifies the ability to keepprofits and pay the surplus to the shareholders.

It is a way to calculate what percentage of earnings isreturned to shareholders.

This trend will show what general direction thecompany is taking with regards to dividend.

EARNING RETENTION RATIO =

NET INCOME - DIVIDEND

NET INCOME


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EARNING RETENTION RATIO formula means

this company shares are profitable for longterm investment vice versa.

The ratio of the year 2011 i.e. 85.91 is higheras compared to the ratio of 2012 i.e82.72.

EARNING

RETENTIONRATIO

85.91 82.72


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After the analysis of financialstatements, the banks status isbetter, because the net workingcapital of the company hasincreased from the last yearsposition


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Documents

Finiancial Ratos of Canara Bank