10-08-2012, 04:39 PM
COMPARATIVE STUDY OF FINANCIAL REPORT OF TOP THREE BANKS OF INDIA
Comparative Study of Financial Report of Three Indian Banks By RAFIK KAAT.pdf (Size: 969.65 KB / Downloads: 491)
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After preparation of the financial statements, one may be interested in knowing the position of an enterprise from different points of view. This can be done by analyzing the financial statement with the help of different tools of analysis such as ratio analysis, funds flow analysis, cash flow analysis, comparative statement analysis, etc. Here I have done financial analysis by ratios. In this process, a meaningful relationship is established between two or more accounting figures for comparison.
Financial ratios are widely used for modeling purposes both by practitioners and researchers. The firm involves many interested parties, like the owners, management, personnel, customers, suppliers, competitors, regulatory agencies, and academics, each having their views in applying financial statement analysis in their evaluations. Practitioners use financial ratios, for instance, to forecast the future success of companies, while the researchers' main interest has been to develop models exploiting these ratios. Many distinct areas of research involving financial ratios can be discerned. Historically one can observe several major themes in the financial analysis literature. There is overlapping in the observable themes, and they do not necessarily coincide with what theoretically might be the best founded areas.
Financial statements are those statements which provide information about profitability and financial position of a business. It includes two statements, i.e., profit & loss a/c or income statement and balance sheet or position statement.
The income statement presents the summary of the income earned and the expenses incurred during a financial year. Position statement presents the financial position of the business at the end of the year.
Before understanding the meaning of analysis of financial statements, it is necessary to understand the meaning of „analysis‟ and „financial statements‟.
Analysis means establishing a meaningful relationship between various items of the two financial statements with each other in such a way that a conclusion is drawn. By financial statements, we mean two statements- (1) profit & loss a/c (2) balance sheet. These are prepared at the end of a given period of time. They are indicators of profitability and financial soundness of the business concern.
Thus, analysis of financial statements means establishing meaningful relationship between various items of the two financial statements, i.e., income statement and position statement
Parties interested in analysis of financial statements
Analysis of financial statement has become very significant due to widespread interest of various parties in the financial result of a business unit. The various persons interested in the analysis of financial statements are:-
Short- term creditors
They are interested in knowing whether the amounts owing to them will be paid as and when fall due for payment or not.
Long –term creditors
They are interested in knowing whether the principal amount and interest thereon will be paid on time or not.
Shareholders
They are interested in profitability, return and capital appreciation.
Management
The management is interested in the financial position and performance of the enterprise as a whole and of its various divisions.
Trade unions
They are interested in financial statements for negotiating the wages or salaries or bonus agreement with management.
Taxation authorities
These authorities are interested in financial statements for determining the tax liability.
Researchers
They are interested in the financial statements in undertaking research in business affairs and practices.
Employees
They are interested as it enables them to justify their demands for bonus and increase in remuneration.
You have seen that different parties are interested in the results reported in the financial statements. These results are reported by analyzing financial statements through the use of ratio analysis.
1. STATE BANK OF INDIA
Type-
Public (BSE, NSE:SBI) & (LSE:SBID)
Founded-
Calcutta, 1806 (as Bank of Calcutta)
Headquarters-
Corporate Centre, Madam Cama Road, Mumbai 400 021 India
Key people-
Om Prakash Bhatt, Chairman
State Bank of India (SBI) (LSE: SBID) is the largest bank in India. It is also, measured by the number of branch offices and employees, the second largest bank in the world. The bank traces its ancestry back 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. 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.
SBI provides a range of banking products through its vast network in India and overseas, including products aimed at NRIs. With an asset base of $126 billion and its reach, it is a regional banking behemoth. SBI has laid emphasis on reducing the huge manpower through Golden handshake schemes and computerizing its operations.
The State Bank Group, with over 16000 branches, has the largest branch network in India. It has a market share among Indian commercial banks of about 20% in deposits and advances.
International presence
Regional office of the State Bank of India (SBI), India's largest bank, in Mumbai. The government of India is the largest shareholder in SBI.
The bank has 52 branches, agencies or offices in 32 countries. It has branches of the parent in Colombo, Dhakka, Frankfurt, Hong Kong, Johannesburg, London and environs, Los Angeles, Male in the Maldives, Muscat, 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.
SBI operates several foreign subsidiaries or affiliates. In 1990 it established an offshore bank, State Bank of India (Mauritius). It has two subsidiaries in North America, State Bank of India (California), and State Bank of India (Canada). In 1982, the bank established its California subsidiary, which now has seven branches. The Canadian subsidiary was also established in 1982 and also has seven branches, four in the greater Toronto area, and three in British Columbia. In Nigeria, it operates as INMB Bank. This bank was established 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 SBI owns 50% of Nepal SBI Bank, which has branches throughout the country. In Moscow SBI owns 60% of Commercial Bank of India, with Canara Bank owning the rest. In Indonesia it owns 76% of PT Bank Indo Monex. State Bank of India already has a branch in Shanghai and plans to open one up in Tianjin.