06-03-2013, 04:49 PM
FINANCIAL ANALYSIS
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Introduction:
Meaning:
Financial analysis (also referred to as financial statement analysis or accounting analysis or Analysis of finance) refers to an assessment of the viability, stability and profitability of a business, sub-business or project.
It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their bases in making business decisions.
• Continue or discontinue its main operation or part of its business;
• Make or purchase certain materials in the manufacture of its product;
• Acquire or rent/lease certain machineries and equipment in the production of its goods;
• Issue stocks or negotiate for a bank loan to increase its working capital;
• Make decisions regarding investing or lending capital;
• Other decisions that allow management to make an informed selection on various alternatives in the conduct of its business.
USERS OF FINANCIAL ANALYSIS:
Financial analysis can be undertaken by the management of the firm, or by the interested parties, outside the firm. The outsiders of the firm are owners (shareholders), creditors, investors and others in particular potential lenders. The nature of the analysis depends upon their purpose or requirement. They make the necessary analysis and take the decision, based on their assessment of the results obtained.
Trade creditors are those who have supplied goods and services to the firm. They are interested in their timely repayment. So, before they supply of render services, they want to be sure that the firm would be in a position to pay their dues, in a short period. They analyse their evaluation of the firm to the firm’s short-term liquidity position. The term ‘liquidity’ refers to the ability to pay, as and when the debts fall due for payment
ABOUT THE BANK
The Indian Bank Limited, the predecessor to Indian Bank, had its genesis in the keen need felt for an Indian Bank managed by Indians on western lines in the wake of the widespread misery caused to the depositors by the failure of the House of Arbuthnot &Co., in the year 1906.The late Hon’ble Shri V. KrishnaswamyIyer conceives the idea of starting a bank in Chennai and called a meeting of prominent citizens on November 3,1906. Following his further efforts, the Indian Bank Limited was incorporated on March 5, 1907, with an authorized capital of20.00 lac. The Bank commenced business on august15, 1907.
The bank began functioning in a portion of the Parry & Co. building in Chennai, and a branch was opened in Madurai in December 1908, followed by branches in Mylapore, Triplicane and Esplanade, all in Chennai, in November 1911,June 1914 and July 1916 respectively.
The Bank celebrated its Silver Jubilee in 1932 when it had 10branches and 5 sub-offices. Total deposits at the end of 1931 were1.73 crore. The Bank celebrated its golden jubilee on December 27, 1957, under the president ship of Dr.Sir C.P. Ramaswamyiyar. The bank then had deposits of 32.56 crore at its 120 branches in Singapore, kualalumpur and Penang, opened in September, November and December 1941, respectively. A branch in Colombo was restarted in November 1947 and a branch was opened in Malacca in 1951.
History
COMPANY PROFILE
In the last quarter of 1906, Madras (now Chennai) was hit by the worst financial crisis the city was ever to suffer. Of the three best-known British commercial names in 19th century Madras, one crashed; a second had to be resurrected by a distress sale; and the third had to be bailed out by a benevolent benefactor. Arbuthnot & Co, which failed, was considered the soundest of the three. Parry's (nowEID Parry), may have been the earliest of them and Binny& Co.'s founders may have had the oldest associations with Madras, but it was Arbuthnot, established in 1810, that was the city's strongest commercial organization in the 19th Century. A key figure in the bankruptcy case for Arbuthnot's was the Madras lawyer, V. KrishnaswamyIyer; he went on to organize a group of Chettiars that founded Indian Bank. Annamalai and RamaswamiChettiar founded Indian Bank (IB) on 5 March 1907, and it commenced operations 15 August 1907 with its head office in Parry's Building, Parry Corner, Madras.
IB began its international expansion in 1932 when it opened a branch in Colombo. A branch in Jaffna followed three years later, but this was not successful and Indian Bank closed it in 1939. Just before World War II reached the region, Indian Bank opened a branch in 1940, in Rangoon (Yangon). The next year it closed the Rangoon branch, but opened branches in Singapore (where future branch manager KB Pisharody (1915–1998) started his career in the same year), and in Kuala Lumpur, Ipoh, and Penang. The rapid advance of the Japanese Army forced IB to close all its branches in Malaya and Singapore. Although the Japanese forces did not reach Ceylon, IB closed the Colombo branch in 1942.
Global Presence
The modest beginning made by the Indian Bank has come a long way since then, with 1642 branches located nationwide within India and Overseas branches in Singapore and Colombo as of April 2009. The bank also has 40 Overseas Correspondent banks in 70 countries’, giving a strong presence internationally. A 22,000 strong workforce of dedicated employees takes pride in serving the Indian Bank.
Banking Activities
Indian Bank offers a wide variety of Banking Products and Services to its customers, including various Deposit Schemes, Loan Options, Financial Services, Stock Investment Services and a number of specialized services such as Remittance, Collection, 7 Day Banking Branches, Cash Management and Electronic Funds Transfer. As of April 2009, the bank has Core Banking Solution (CBS) implemented in its 1642 branches and 66 extension counters. The bank has 755 connected Automatic Teller Machines (ATMs) installed in 225 locations nationwide.