DECLARATION

I hereby declare that the project work entitled " Cash Flow Statement of
Nepal Bank Limited" submitted to the Faculty of Management,
Tribhuvan University, Kathmandu is an original Peace of work under
the supervision of Mr. ………………. lecturer of Arunodaya College,
Gitanager, Chitwan and it is submitted in partial fulfillment of the
requirement for the degree of Bachelors of Business Studies (BBS).
This project work report has not been submitted to any other university
or institution for the award of any degree of diploma.

……………………………….
Arunodaya College
Gitanagar, Chitwan
Date : ……………………
 SUPERVISOR'S RECOMMENDATION

The project work report entitled "Cash Flow Statement of Nepal Bank
Limited" submitted by ………………………………… of Arunodaya
College, Gitanagar, Chitwan, is prepared under my supervision as per
the procedure and format requirements laid by the Faculty of
Management, Tribhuvan University, as partial fulfillment of the
requirements for the award of the degree of Bachelor of Business
Studies (BBS). I, therefore, recommend the project work report of
evaluation.

…………………………………….
Mr. …………………….
Arunodaya College
Date : ……………………
 ENDORSEMENT

We hereby endorse the project work report entitled "Cash Flow Statement
of Nepal Bank Limited" submitted by ………………….. of Arunodaya
College, Gitanagar, Chitwan. in partial fulfillment of the requirements
for award of the Bachelors of Business Studies (BBS) for external
evaluation.

…………………………. …….
………………………
Mr………………. Mr. Kumar Raut
Chairman, Research Committee for Principal
Arunodaya College Shree Arunodaya College

Date …………….
 ACKNOWLEDGEMENT

This project work entitled "Cash Flow Statement of Nepal Bank Limited "has
been prepared as partial requirement for the Bachelors of Business Studies. It
would have been almost impossible to complete this academic eork without co-
operation and help from other people beside me.

I am greatly obliged to my report advisor Mr…………………………… , Lecturer

of Shree Arunodaya College, Gitanagar for providing continuous guidelines,
valuable comments and constructive suggestions.

My Special thank goes to Principal Mr. Kumar Raut, Mr, ……………………….

(Research Head) and Mr. ………………… lecturer of Shree Arunodaya College
for their proper encouragements and cooperation.

Finally I would like to a lot of thank whole NIBLL Family for help in providing
all the necessary actual data and information. At last but not least, I wish to
express my deep appreciation to Mr. Madhu Khanal who helped me in computer
typing and designing

Thank you,

………………..
BBS 4th Year
 TABLE OF CONTENTS
Title Page i
Declaration ii
Supervisor Recommendation iii
Endorsement iv
Acknowledgement v
Table of Contents vi
List of Tables vii
List of Figure viii
List of Abbreviations ix
CHAPTER –I : INTRODUCTION
1.1 Background of the study 1
1.1.1 Brief introduction of Nepal Bank Limited 2
1.2 Statement of Problem 2
1.3 Objective of the Study 3
1.4 Rational of the Study 3
1.5 Review of the Previous Studies 4
1.6 Research Methods 6
1.7 Limitations of the Studies 12

CHAPTER – II: RESULTS AND ANALYSIS

2.1 Data Presentation 13
2. Major Finding of Studies 27

CHAPTER – III: SUMMARY AND CONCLUSION

3.1 Summary 29
3.2 Conclusions 29

REFRENCES
APPENDICES
 LIST OF TABLES

Table Page
No. Titles No.
2.1 Cash Flow from Operating Activities and Growth of NBL 13
2.2 Cash Flow from Investing Activities and Growth of NBL 15
2.3 Cash Flow from Financing Activities and Growth of NBL 16
2.4 Return on Loan and Advance 18
2.5 Return on Total Assets Ratio 19
2.6 Return on Equity Ratio 20
2.7 Correlation between CFOA and CFIA 21
2.8 Correlation between CFOA and CFFA 22
2.9 Correlation between CFIA and CFFA 22
2.10 Trend Analysis of CFOA of NBL 24
2.11 Trend Analysis of CFIA of NBL 25
2.12 Trend Analysis of CFFA of NBL 26
 LIST OF FIGURES

Figure Page
No. Titles No.
2.1 Graphical Presentation of Growth of CFOA of NBL 14
2.2 Graphical Presentation of Growth of CFIO of NBL 16
2.3 Graphical Presentation of Growth of CFFA of NBL 17
2.4 Trend Line of CFOA of NBL 24
2.5 Trend Line of CFIA of NBL 26
2.6 Trend Line of CFFA of NBL 27
 ABBREVIATIONS

AR - Average Revenue
CDCR - Cash Debt Coverage Ratio
CFFA - Cash Flow from Financing Activities
CFIA - Cash Flow from Investing Activities
CFOA - Cash Flow from Operating Activities
CFS - Cash Flow Statement
CICR - Cash Interest Coverage Ratio
CL - Current Liabilities
CR - Current Ratio
CV - Coefficient of Variance
FY - Fiscal Year
i.e. - That is
NBL - Nepal Bank Limited
PE - Probable Error
SD - Standard Deviation
 CHAPTER-I
INTRODUCTION
1.1 Background of the Study
Cash flow is one of the major important tools for performance measurement.
Cash is the blood of every organization which spreads in every activities of
business organization. Managing cash is very crucial. Therefore priorities
should be given to manage cash in productive manner. To manage cash in
effective way, it requires good controlling mechanism. Similarly
policy/decision maker should make the strategies to manage cash. Among
the various methods of managing cash, cash flow statement is assumed as the
most important tool.
Cash being lifeblood of every organization, no any business organization can
even imagine without cash. Similarly without cash, no any business
transaction can be made. So, a business must have adequate amount of cash
to operate. The decision maker must pay attention to the firm's events and
transaction that affect cash position. The analysis of events and transactions
affecting the cash position is termed as cash flow analysis.
Cash flow statement conveys the information regarding the cash receipt and
cash payment of the firm during the accounting period. Cash Flow statement
is prepared in such manner that the decision maker easily aware about the
cash position of the firm (Dangol, 2009).
Cash is the gasoline that makes our business run. Cash flow can be defined
as the way money moves into and out of business; it is the difference
between just being able to open a business and being able to stay in business.
A cash flow analysis is a method of checking up on firm's financial health. It
is the study of the movement of cash through business, called a cash budget,
to determine patterns of how we take in and pay out money. The goal is to
maintain sufficient cash for firm operations from month to month. This type
of cash flow analysis is called developing the cash budget.
In recent years, the statement of cash flows has come to be viewed as a part
of full set of financial statement. Cash flow statement provides relevant
information about the cash receipts and cash payments of an enterprise
during a period. Information about enterprises cash flows is useful in
assessing its liquidity, financial flexibility, profitability and risk. Cash flow
information is widely used by investors, analyst, creditors, managers and
others.
1.1.1 Brief Introduction of Nepal Bank Limited
Nepal Bank Limited, the first bank of Nepal was established in November
15, 1937 A.D (Kartik, 30, 1994). The bank has been providing banking
through its branch offices in the different geographical locations of the
country. From the very conception and its creation, Nepal Bank Limited was
as joint venture between the government and the private sector. Out of 2500
equity shares of NRs. 100 face value, 40% was subscribed by the
government and the balanced i.e. 60% was offered for the sale to private
sector. There were only 10 shareholders when the bank first started. Nepal
Bank Limited is providing services to its customers from its 133 branches. It
provides deposit facility, various loan facilities, advanced ABBS services
from 133 branches, Internet Banking along with the ATM facilities all over
the country.
1.2 Statement of Problems
Government of Nepal has made a rule to show the cash flow statement at the
end of fiscal year while paying income tax. Cash flow statement provides the
actual liquidity position i.e. cash receipt and cash payment of organization.
Similarly it helps to decision (Policy) maker for proper planning and making
decision regarding the cash. The proper implementation of cash flow
statement helps to flourish the organization.
However, many business organizations are facing the problem of cash
because they do not know application of cash flow statement. Similarly they
don't know what type of relationship should between the different
components of cash flow statement. The main research problem of this study
is to examine the cash flow analysis of Nepal Bank Limited are as follows:
i. What is the cash flow analysis between operating, investing and
financing activities using cash flow of NBL?
ii. What is the relationship between cash flow variables of NBL?
iii. What are the trend of cash flow variables and other ratios of NBL?
 1.3 Objectives of the Study
Every financial institutions or business organization prepares cash flow
statement. The main objective of this project report is to analyze the cash
flows statement analysis and other specific objectives are as follows:
i. To examine the cash flow analysis between operating, investing
and financing activities using cash flow of NBL.
ii. To analyze the relationship between cash flow variables of NBL.
iii. To examine the trend of cash flow variables and other ratios of
NBL.
1.4 Rationale of the Study
This project report specially helps to practitioner for financial planning in
their respective organization. Practitioner can use this study in formulation
and execution of different kinds of policy relating to cash. Any organization
doesn't exist without cash. Similarly, mishandling of cash pushes
organization towards the failure. Every activity either directly or indirectly
relates with cash. Therefore management of cash is highly prioritized. For
this every organization prepares cash flow statement with segregating into
different headings: Operating, Investing and Financing Activities.
Similarly, this study helps to decision maker about the proper planning and
implementation of cash flow in their organization. This study conveys the
extent of success or failure in cash planning after comparing the different
ratios. It helps to find out the role of cash flow in cash planning to policy
makers. Only the preparation of cash flow statement is not sufficient. It
should be analyzed in systematic manner. Therefore in this study cash flow
ratios have been analyzed. It helps to compare between the required and
actual relationship necessary between the different operating, investing and
financing activities. It will be beneficial and helpful to concerned people like
management, shareholders, policy makers and stakeholders, concerned
organizations, government and other researchers for further research.

1.5 Review of Previous Studies

Karki (2017) conducted a study under topic -Cash Management in Listed
Manufacturing Companies". The objectives of the study were:
i. To examine and critically analysis the cash management practices in
listed manufacturing companies.
ii. To identify the liquidity position of the companies.
iii. To study the relationship of cash with other influencing aspects of
cash management. Whether it is significant or not.
To accomplish the above objectives, he has made research covering the five
years data. Other essential information is taken from the primary data while
secondary source of data are used in the research methodology.
Major findings were as follows:
i. Listed manufacturing companies don't have any definite policy
regarding how much cash balance to hold in each period.
ii. Listed manufacturing companies have failed to maintain adequate
proportion of cash on its current assets. The average cash to current
ratio has been observed to be 7.95%, 1.25%, 5.71%, 11.92%,
10.06% and 13.86%.
iii. Companies have not been precisely meeting their current liabilities
payment.
iv. Companies are not found to maintain adequate proportion of cash as
its quick assets.
v. The average collection period and payable deferral period have been
found to be 531 days and 88 days.
vi. Liquidity position of listed manufacturing companies has not been
satisfactory. The companies' overall average CR and QR have been
obtained 1.51 and 0.92 respectively.

Puri (2017) has conducted a research entitled "Cash Flow Analysis of Nepal
Telecom" He has used only secondary data. The objectives of the study were:
To analyses the cash flow of NTC to get the in-depth information related with cash management.

i. To analyses the trend of cash flow of NTC.

ii. To examine, analyses and compare the cash flow of different headings
(i.e. operating, investing and financing)
iii. To identify the strengths and weaknesses of cash management of NTC.
The findings of the study were:
i. Operating profit before adjustment of working capital is in positive
growth for every year.
ii. NTC has made huge repayment of retained earnings to Nepal
Government and payments of long term debt are the major cause of
cash outflow for these FY.
iii. Regular financing activities of NTC are long term debt
receipt/payment, dividend payment and repayment of retained
earnings to Nepal Government (NG).
iv. There is loss on foreign exchange.
v. Net cash flow is fluctuation.
vi. There is positive correlation between CFOA, NPBT and CFIA.
vii. There is not scarcity of cash during the period to operate its general
activities.
Previous researchers conducted their research on different headings like:
Cash Management, Cash Flow Analysis of different companies. However
there is no previous research made on cash flow statement analysis of Nepal
Bank Limited. This project report has been quite different from other study
because in this project report using many statistical tools as well as using
recent data in FY 2013/14 to 2017/18. The data collected are of original and
latest in nature.

1.6 Research Methods

The main purpose of this chapter is to focus on different research methods
which are used while conducting this study. Every study needs a systematic
methodology to show the better result of the research. In this study analysis
of cash flow statement of Nepal Bank Limited also need an appropriate
research method.
i) Research Design
Thus research design is a research plan or structure which is path for
conducting research work. Without research design, it is not possible to
conduct a research work. A well settled research design is necessary to fulfill
the objective of this study. It means definite procedure and techniques that
guide to study and propounds way of research variability. The present project
report is basically a case study of Nepal Bank Limited. This project report is
based on descriptive research design. For the analysis of this study, past data
of last five year are collected to find out the performance of NBL.
ii) Population and Sample
There are altogether 28 commercial banks functioning all over the country
till End of 2017 (www.nrb.org.np), which are taken as a population of this
project report. Among them, only one commercial bank namely; Nepal Bank
Limited has been selected as a sample for this project report by using
convenience sampling methods.
iii) Types of Data
The study has been based on secondary data. The secondary sources of data
collections are those that have been used from published on used by someone
previously. The secondary sources of data are Balance Sheet, Profit & Loss
account and literature publication of the bank. Some supplementary data and
information have been collected from the authoritative sources like Nepal
Rastra Bank, journals, magazines and other published and unpublished
reports.

iv) Data Collection Procedures

The data presented in the study report was secondary type. The annual report
of the bank was the major sources of the data for the study. However, besides
the annual reports of the subjected bank the source of data has been used in
the respective corner of the study.
v) Tools for Analysis
Simple descriptive tools such as frequency, mean, standard deviations, CV
and correlation has been used. The ratio analysis involves comparison for a
useful interpretation of financial statements. The quantities judgment
regarding cash flow management of a firm can be done with the help of rate
analysis. For the analysis of the data the financial and statistical tools
relevant to the topic has been used.
A) Financial Tools
Financial position and performance of a company can be measured using
ratios between different variables of the statement of cash flows. Some of the
key cash flow ratios are mentioned below.
I) Profitability Ratios
Profit is only appeared when there is positive difference between total
revenues and total cost over a certain period of time. Profitability ratios show
the combined effects of liquidity, assets management, and debt on operating
results. Here profitability ratios are calculated and evaluated in terms of the
relationship between net profit and assets. Profitability of the firms can be
presented through the following different ways:
i) Return on Loan and Advances Ratio
Return on loan and advances ratio shows how efficiently the banks have
utilized their resources to earn good return from provided loan and advances.
This ratio is computed dividing net profit (loss) by the total amount of loan
and advances and can be mentioned as,
Net Profit (Loss)
Return on Loan∧ Advances Ratio=
Loan∧ Advances
ii) Return on Total Assets Ratio
Return on total assets ratio measures the profit earning capacity of the banks
by utilizing available resources i.e. total assets. If the bank's well managed
and efficiently utilized its assets, it will get higher return. Maximizing taxes,
this in the legal options available will also improve the return. It is computed
as:
Net Profit
Return on T otal Assets Ratio=
Total Assets

iii) Return on Equity

This ratio reflects the extent to which the banks are successful in mobilizing
this equity to acquire income as interest. Higher the ratio higher will be the
income as interest. We have, Net Profit
Net Profit
Return Equity Ratio=
SHE

B. Statistical Tools
For supporting the study, statistical tool such as mean, standard deviation,
coefficient of variation, correlation, trend analysis and diagrammatic cum
pictorial tools have been used under it.
I. Arithmetic Mean ( X ):
Average is statistical constants, which enable us to comprehend in a single
effort of the whole. It represents the entire data by a single value. It provides
the gist and gives the bird's eye view of the huge mass of unwieldy numerical
data. It is calculated as:

X=
∑x
N

Where,
X = Arithmetic Mean
N = Numbers of observation Sum of observation
∑x = Sum of observation
II. Standard Deviation (S.D.)
The standard deviation is the square root of mean squared deviations from
the arithmetic mean and is denoted by S.D. or a. It is used as absolute
measure of dispersion or variability. It is calculated as:
σ =√ ∑ ¿ ¿ ¿ ¿

Where,
σ = Standard Deviation
III. Coefficient of Variation (C.V.)
The co-efficient of variation (C.V.) is the relative measure based on the
standard deviation and is defined as the ratio of the standard deviation to the
mean expressed in percentage it is independent of units. Hence, it is a
suitable measure for comparing variability of two series with same or
different units. A series with smaller C.V. is said to be less variable or more
consistent or more homogeneous or more uniform or more stable than the
other and vice versa. It is calculated as:
σ
C.V= ×100
X

Where,
σ = Standard deviation
X = Mean

IV. Correlation Coefficient (r)

Correlation Coefficient is the important tool to analyze the degree of
relationship between two or more variables. It is used t describe the degree to
which one variable in the linearly related to other variables. It refers the
closeness of the relationship between two or more variable. In other words, it
is an analysis of covariance between two or more variables.
It is the statistical measure of the relationship. If any, between series of
numbers representing data of any kind, from returns to test scores. If two
series move in opposite direction, they are positively correlated; if the series
move in opposite direction, they are negatively correlated.
The degree of correlation is measured by the correlation coefficient, which
ranges from +1 for perfectly correlated series to -1 for perfectly negatively
correlated series. Symbolically, correlation coefficient can be expressed as
follows:
n ∑ xy −∑ x . ∑ y
CorrelationCoefficient ( r ) =
√¿ ¿ ¿

Correlation analysis describes the relationship between variables i.e. positive

or negative. It helps to determine the following.
1. A positive or negative relationship exists.
2. The relationship is significant on insignificant.
3. Establish cause and effect relation if any.
The statistical tool-correlation analysis is used in the study to measure the
relationship between variables in determining within the relationship is
significant or not. For the purpose decision making interpretation are based
on the following terms.
1. When, r = 1, then it is perfect positive correlation.
2. When, r = -1, then it is perfect negative correlation.
3. When, r = 0, then is no correlation variable are independent.
4. When, 'r' lies between 0.7 to 0.999, then is high degree of positive
correlation.
5. When, 'r' lies between 0.5 to 0.7999 there is moderate degree of
correlation.
6. When, 'r' is less than 0.5, there is low degree of correlation.
V. Probable Error (P.E.)
The probable error of the Coefficient of correlation helps in interpreting its
value. With the help of probable error, it is possible to determine the
reliability of the value of the coefficient in so far as it depends on the
conditions of random sampling. The probable error of the coefficient of
correlation is obtained as follows:
1−r 2
PE=0.6745×
√N
Where,
r = Correlation coefficient
N = Number of pairs of observations
If the value of 'r' is less than the probable error, there is no evidence of
correlation, i.e., the value of r is not at all significant. Then, if the value of 'r'
is more than six times of the probable error, the coefficient of correlation is
practically certain, i.e. the value of 'r' is significant.
VI. Trend Analysis
Trend analysis is used to measure the change of financial, economical as well
as commercial data. The least square method to trend analysis has been used
in measuring the trend analysis. This method is widely used in practice. The
Straight-line trend of a series of data is represented by the following formula.
Y = a+bx
Where,
Y = Dependent variable
x = Independent variable
a = Y - intercept
b = Slope of the trend line
Y is the dependent variable, a is y intercept or value of y when x = 0, b is the
slope of the trend line.
1.7 Limitations of the Study
The study has been concerned with the implementation of cash flow
statement in Nepalese commercial banks. However study has been analyze
the cash flow statement analysis of Nepal Bank Limited. Therefore, this
study was not free from the following limitation:
i. This study is based on five year's financial statement from FY
2013/14 to 2017/18.
ii. Basically this analysis is based on secondary data provided by the
annual report of NBL which was published by NBL.
iii. Data were discrepancy & reliability of study depends upon data
provided by the bank.
iv. This study has been concerned only with quantitative techniques of
performance measurement. It ignores other qualitative techniques of
performance measurement.
 CHAPTER-II
RESULTS AND ANALYSIS
This section is the main text of the study and it helps to find out the answer
of research question as well as objectives of the study. This chapter includes
presentation, analysis and integration of collected data as per the objectives
of the study in organizing sequentially. In this chapter most recently
published financial statements of the Nepal Bank Limited is analyzed. To
analyze the collected and the tabulated data of this bank different financial
and statistical tools have been used. To analyze the performance of this bank
using cash flow statement.
2.1 Data Presentation
Cash is the heart of business. It is one of the most important current assets for
operation of business. Therefore the bank should maintain sufficient cash,
neither more nor less. Keeping more or less cash is harmful for the business.
It may be the cause of losing opportunity cost. Cash and Cash Equivalent
refers to the cash in hand, cash at bank and cash in transit.
I) Cash Flow Analysis
A) Cash Flow from Operating Activities
The following table and figure represents the cash flow from operating
activities and the growth this during the five study period.
Table 2.1: Cash Flow from Operating Activities and Growth of NBL
(Rs. in millions)
Fiscal Years Operating Activities Growth
2013/14 (1975.65) -
2014/15 (7954.48) 302.63
2015/16 2506.79 (131.51)
2016/17 6722.89 168.19
2017/18 561.95 (91.64)
Mean (27.70)
Source: Annual Reports of NBL from FY 2013/14 to 2017/18
The overall CFOA of NBL is Rs. (1975.65), Rs. (7954.48), Rs. 2506.79, Rs.
6722.89 and Rs. 561.95 million respectively. From the above analysis it can
be concluded that there is too much variation in cash flow from operating
activities of this bank. According to this analysis the bank has negative cash
flow in two financial year. i.e. FY 2013/14 and 2014/15 and three financial
year have positive cash flow i.e. 2015/16, 2016/17 and 2017/18.
Figure 2.1: Graphical Presentation of Growth of CFOA of NBL
400

300

200
Growth in %

100

0
2013/14 2014/15 2015/16 2016/17 2017/18

-100

-200
Fiscal Years

Source: Table 2.1

The figure depicts the growth rate of the cash flow from operating activities
of this bank is only positively growth in fiscal year 2014/15 and 2016/17 i.e.
302.63 and 168.19 percent respectively. Likewise growth rate of cash flow
from operating activities of this bank is in negatively growth in fiscal year
2015/16 and 2017/18 i.e. (131.5) and (91.64) percent respectively.
B) Cash Flow from Investing Activities
Cash flow from investing activities is an item on the cash flow statement that
reports the aggregate change in a banks cash position resulting from any
gains (or losses) from investments in the financial markets and operating
subsidiaries and changes resulting from amounts spent on investments in
capital assets such as plant and equipment. When analyzing a company's
cash flow statement, it is important to consider each of the various sections
which contribute to the overall change in cash position. In many cases, a firm
may have negative overall cash flow for a given quarter, but if the company
can generate positive cash flow from business operations, the negative
overall cash flow may be a result of heavy investment expenditures, which is
not necessarily a bad thing.
Table 2.2: Cash Flow from Investing Activities and Growth of NBL
(Rs. in Millions)
Fiscal Years Investing Activities Growth
2013/14 (67.50)
2014/15 (80.10) (18.67)
2015/16 (89.59) (11.84)
2016/17 (90.66) (1.20)
2017/18 (112.26) (23.82)
Mean (88.02)
Source: Annual Reports of NBL from FY 2013/14 to 2017/18
CFIA of NBL is in appearing in negative over the study periods form FY
2013/14 to FY 2017/18 i.e. Rs. (67.50), Rs. (80.10), (89.59), Rs. (90.66) and
(112.26) millions respectively. Positive CFIA shows the bank has collected
cash by selling its either fixed assets or investment or securities and negative
CFIA shows the bank has invested its cash either in fixed assets or in
securities. Negative CFIA of NBL is increasing every year, which shows that
bank has invested its money for purchasing either fixed assets or securities.
Mean of CFIA is also negative because of cash outflow is higher than the
cash in flow from investing activities.
 0
2013/14 2014/15 2015/16 2016/17 2017/18

-5

-10
Growth in %

-15

-20

-25

-30
Fiscal Years

Source: Table 2.2

The above figure shows growth of cash flow from investing activities. In the
above figure the growth is appearing negatively during study period.
C) Cash Flow from Financing Activities
A category in a company's cash flow statement that accounts for external
activities that allows a firm to raise capital and repay investors, such as
issuing cash dividends, adding or changing loans or issuing more stock. Cash
flow from financing activities shows investors the company's financial
strength. A company that frequently turns to new debt or equity for cash, for
example, could have problems if the capital markets become less liquid.
Table 2.3: Cash Flow from Financing Activities & Growth of NBL
(Rs. in Millions)
Fiscal Years Financing Activities Growth
2013/14 2132.56
2014/15 496.37 (76.72)
2015/16 312.12 (37.12)
2016/17 1245.78 299.13
2017/18 1632.44 31.04
Mean 1163.86
Source: Annual Reports of NBL from FY 2013/14 to 2017/18
Every year CFFA of NBL seems positive. The highest cash flow amount is
in the fiscal year 2013/14 i.e. Rs. 2132.56 and lowest cash flow amount is in
fiscal year 2015/16 i.e. Rs. 312.12. Highest positive cash flow amount
indicate there is high amount inflow in the bank from financing activities and
lowest amount indicate that there is low cash inflow in the bank from
financing activities.
Figure 2.3: Graphical Presentation of Growth of CFFA of NBL
350
300
250
200
Growth in %

150
100
50
0
2013/14 2014/15 2015/16 2016/17 2017/18
-50
-100
Fiscal Years

Source: Table 2.3

Above figure shows graphical presentation of the growth of tile cash flow
from financing activities. In above figure growth rate is in positive in last two
fiscal year and negative in first two fiscal years. Positive growth rates are
299.13 percent and 31.04 percent in FY 2016/17 and 2017/18 respectively.
Same as (76.72) percent and (37.12) percent in FY 2014/15 and 2015/16
respectively.
II) Profitability Ratio
The major performance indicator of any firm is profit. The objective of
investment policy is to make good return. Any organization has to desire of
earning high profited which helps to survive the firm and indicates the
efficient operation of the firm. Profit is the essential part of business
activities to meet internal obligation, overcome the future contingencies,
make a good investment policy, expand the banking transaction etc.
a) Return on Loan and Advances
Every financial institution tries to mobilize their deposits on loan & advances
properly. So this ratio helps to measure the earning capacity of selected
banks. Returns on loan & advances ratio of selected banks are presented as
follows.
Table 2.4 : Return on Loan and Advance
(Rs. in Millions & Ratio in %)
Fiscal Years Net Profit Loan & Advance Ratio
2013/14 755.18 35611.70 2.12
2014/15 716.96 39035.60 1.84
2015/16 483.85 50970.86 0.95
2016/17 2882.98 61250.07 4.71
2017/18 3117.89 71745.89 4.35
Mean 1591.37 51722.82 2.79
SD 1293.15 15106.22 1.65
CV 81.26 29.21 58.97
Source: Annual Report of NBL FY 2013/14 to 2017/18
Above table shows that return on loan and advances ratio of NBL is
fluctuating trend. The highest ratio of NBL is 4.71% in the year 2016/17 and
lowest ratio 0.95% in year 2015/16. The mean ratio is 2.79%. The highest
ratio indicates that bank able to generate the high profit in invested loan and
advances and the lowest ratio indicates the lower earning capacity in invested
loan and advances. From the above calculation the bank able to generate high
profit in FY 2015/16.
b) Return on Total Assets
This ratio measures the overall profitability of all working fund i.e. Total
assets. A firm has to earn satisfactory return on working funds for its
survival. The following table shows return on total assets ratio of selected
banks.

Table 2.5: Return on Total Assets Ratio

 (Rs. in Millions & Ratio in % )
Fiscal Years Net Profit Total Assets Ratio
2012/13 755.18 70776.98 1.07
2013/14 716.96 77980.53 0.92
2014/15 483.85 88211.09 0.55
2015/16 2882.98 103479.53 2.79
2016/17 3117.89 112057.15 2.78
Mean 1591.37 90501.06 1.62
SD 1293.15 17205.76 1.08
CV 81.26 19.01 66.57
Source: Annual Report of NBL FY 2013/14 to 2017/18
Above table shows the return on total assets of NBL has fluctuating_ trend
over the study periods. The highest ratio of the bank is 2.79% in FY 2016/17
and lowest ratio is 0.55% in FY 2015/16 respectively. From the above
analysis it can be conclude that the bank has very poor condition to generate
return in invested total assets.
c) Return on Equity
Equity capital of any bank is its owned capital. The prime objective of any
bank is wealth maximization or in other words to earn high profit and
thereby, maximizing return on its equity capital. Return on equity plays the
measuring role of profitability of bank. It reflects the extent to which the
bank has been successful to mobilize or utilize its equity capital. A high ratio
indicates higher successful to mobilize its owned capital and vice-versa.
Following table shows the return on equity of NBL during the study period.

Table 2.6: Return on Equity Ratio

 (Rs. in Millions & Ratio in %)
FY NP SHE Ratio
2013/14 755.18 7641.87 9.88
2014/15 716.96 9582.92 7.48
2015/16 483.85 9099.07 5.32
2016/17 2882.98 4913.91 58.67
2017/18 3117.89 11451.75 27.23
Mean 1591.37 8537.90 21.72
SD 1293.15 2440.99 22.40
CV 81.26 28.59 103.16
Source: Annual Report of NBL FY 2013/14 to 2017/18
The above table shows return on equity ratio of NBL is fluctuating trend over
the study periods. During the study period bank has maintained highest ratio
is 58.67% in fiscal year 2016/17 and lowest ratio is 5.32% in the year
2015/16. Every investor preferred the high earning proposal while he
investing, returnable sector.
III) Statistical Analysis
Statistical tool is one of the important tools to analyze the data. There are
various tools for the analysis of tabulated data such as, mean, standard
deviation, co-relation analysis, trend analysis etc. There is used following
convenient statistical tools are used in this project report study.
i) Coefficient of Correlation Analysis
Co-efficient of co-relation shows the relationship between two or more than
two variables. It measures that the two variables are positively or negatively
co-related. For this purpose, Karl Pearson's co-efficient of correlation has
been taken and applied to find out and analyze the relationship between cash
flow from operating activities and cash flow from investing activities, cash
flow from operating activities and financing activities, cash flow from
investing and financing activities. NBL using Karl Persons coefficient of
correlation, value of coefficient of determination (r 2), probable error (P.E.)
and (6 P.E.) are also calculated and value of them are analyzed.
A) Correlation Coefficient between CFOA and CFIA
Cash flow from operating activities and cash flow from investing activities
plays the very important role in overall performance of the bank's financial
status of the bank. Cash flow analysis is used to identify the sources of cash
outflow and cash inflow of the concerned organization of the tow fiscal year.
Co-efficient of correlation between cash flow from operating and investing
activities measures the degree of relationship between these two variables.
In this analysis, cash flow from operating activities is independent variable
(X) cash flow from investing activities is dependent variable (Y). The main
objective of computing "r" between these two variables is to justify whether
these two variables are significantly correlated in proper way or not.
Table 2.7: Correlation between CFOA and CFIA

Name of Evaluation Criterions

Banks r r2 PE 6 PE
NBL -0.39 0.1499 0.2564 1.5386

From the above table, it is found that coefficient of correlation between

CFOA and CFIA NBL is -0.39 which indicate low degree negative
correlation between CFOA and CFIA. It refers that CFOA and CFIA of NBL
move together very distantly. Moreover, the coefficient of determination is
0.1499. It means 14.99 percent of variation in CFOA has been explained by
CFIA. Similarly, value of probable error is 0.2564. The correlation
coefficient of CFOA and CFIA is insignificant because the value correlation
coefficient is very lower than the relative value of 6 PE. In other words, there
is insignificant relationship between CFOA and CFIA.
B) Coefficient of Correlation between CFOA and CFFA
The coefficient of correlation between CFOA and CFFA measures the degree
of relationship between these two variables whether they are significantly
correlated or not. In correlation analysis, deposit is CFOA variable (X) and
CFFA dependent variable (Y). The following table shows the coefficient
correlation between CFOA and CFFA i.e. r, P. E., 6 P.E. and coefficient of
determination (r2) of NBL during the study period.
Table 2.8: Correlation between CFOA and CFFA
 Name of Evaluation Criterions
Banks r r2 PE 6 PE
NBL 0.12 0.0155 0.2970 1.7819
From the above table, the researcher found that the coefficient of correlation
between CFOA and CFFA of NBL is 0.12. It shows the low degree positive
correlation. In addition, coefficient of determination is 0.0155. The
correlation coefficient is insignificant because the correlation coefficient is
lower than the relative value of 6PE. It refers that there is insignificant
relationship between CFOA and CFFA.
C) Co-efficient of Correlation between CFIA and CFFA
Co-efficient of correlation between CFIA and CFFA is used to measure the
degree of relationship between two variables i.e. CFIA and CFFA of NBL
during the study period. Where CFIA is independent variable (X) and CFFA
is dependent variable (Y). The main objective of calculating this ratio is to
determine the degree of relationship whether there the CFIA is significantly
correlated or not and the variation of CFFA through the coefficient of
determination. The following table shows the r, r2, P.E. and 6 P. E. between
those variables of NBL.
Table 2.9: Correlation between CFIA and CFFA

Name of Evaluation Criterions

Banks r r2 PE 6 PE
NBL 0.09 0.0075 0.2994 1.7963
Above table shows correlation coefficient between, CFIA and CFFA is 0.09.
It refers that there is very low degree positive correlation between these two
variables. Determination of correlation coefficient is 0.0075. Moreover, this
relationship is insignificant because the coefficient of correlation is lower
than the value of 6PE.

IV) Trend Analysis

Trend analysis plays an important role in the analysis and interpretation of
financial statement. Trend in general terms, signifies a tendency. It helps in
forecasting and planning future operation. Trend analysis is a statistical tool,
which shows the previous trend and forecasts the future financial results of
the firms.
A) Trend Analysis of CFOA
Cash flow from operating activities measures the financial performance of
two periods in relation to cash in flow and cash out flow from operating
activities of the bank. Operating activities includes these all types of
activities related to the company's expense and income related to sales and
production. This is calculated by the least square method. Here the effort has
been made to calculate the trend values of operating activities of Nepal Bank
Limited for further five year.
Y= a + bx
Where as
Yc = (27.70) +1975.26x
Table 2.10: Trend Analysis of CFOA of NBL
(Rs. in Millions)
Year(x) Actual Value Trend Value
2013/14 (1975.65) (3978.21)
2014/15 (7954.48) (2002.95)
2015/16 2506.80 (27.70)
2016/17 6722.89 1947.56
2017/18 561.95 3922.82
2018/19 5898.07
2019/20 7873.33
2020/21 9848.59
2021/22 11823.84
2022/23 13799.10
Source: Appendix I
Figure 2.4 : Trend Line of CFOA of NBL
Actual Value Trend Value
15000 Fiscal Years

10000
Rs. In Millions

5000

0
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23

-5000

-10000

Source: Table No 2.10

Above table and figure shows that trend between actual and forecasted value
of the CFOA. Actual value of this bank is fluctuating trend and forecasted
values are in the increasing trend. The increasing trend of CFOA of NBL is
aggressive and high but this result is negatively.
The trend analysis has projected CFOA amount in fiscal year FY 2018/19 to
FY 2022/23.
B) Trend Analysis of CFIA
Here, the trend values of CFIA between actual and forecasted value have
been calculated for further five year. The following table shows the actual
and trend values of NBL.
Y= a + bx
Where as Y= (88.02) + (10.01)x
Table 2.11: Trend Line of CFIA of NBL
(Rs. in Millions)
Year(x) Actual Value Trend Value
2013/14 (67.50) (68.01)
2014/15 (80.10) (78.02)
2015/16 (89.59) (88.02)
2016/17 (90.66) (98.03)
2017/18 (112.26) (108.04)
2018/19 (118.04)
2019/20 (128.05)
2020/21 (138.06)
2021/22 (148.07)
2022/23 (158.07)
Source: Appendix II
Above table and below figure depicts that CFIA of NBL. The figure shows
the trend line of the actual value is in decreasing trend and the forecasted
value is also decreasing trend. The trend projected for further five year FY
2018/19 to FY 2022/23.
 Actual values Trend Values
0 Fiscal Years
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23
-20

-40

-60
Rs. In Millions

-80

-100

-120

-140

-160

-180

Source.- Table No. 2.11

C) Trend Analysis of CFFA
Under this topic, an attempt has been made to analyze trend analysis of
CFFA of NBL for further five years.
Y= a + bx
Where as Y= 1163.86 + (25.08) x
Table 2.12: Trend Line of CFFA of NBL
(Rs. in Millions)
Year(x) Actual Value Trend Value
2013/14 2132.56 1214.02
2014/15 496.37 1188.94
2015/16 312.12 1163.86
2016/17 1245.78 1138.77
2017/18 1632.44 1113.69
2018/19 1088.61
2019/20 1063.52
2020/21 1038.44
2021/22 1013.36
2022/23 988.25
Source: Appendix III
 Actual Value Trend Value
Fiscal Years
2500

2000
Rs. In Millions

1500

1000

500

0
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23

Source: Table No. 2.12

Above table and figure shows the trend between actual value and the
forecasted value of CFFA. According to the above table and the figure the
value of the actual CFFA is fluctuating type and the forecasted value of
CFFA is decreasing type. The trend of CFFA projected to FY 2022/23.
2.2 Major Finding of the Study
i. The overall CFOA of NBL is Rs. (1975.65), Rs. (7954.48), Rs.
2506.79, Rs. 6722.89 and Rs. 561.95 million respectively. From the
above analysis it can be concluded that there is too much variation in
cash flow from operating activities of this bank.
ii. CFIA of NBL is in appearing in negative over the study periods form
FY 2013/14 to FY 2017/18 i.e. Rs. (67.50), Rs. (80.10), (89.59), Rs.
(90.66) and (112.26) millions respectively.
iii. Every year CFFA of NBL seems positive. The highest cash flow
amount is in the fiscal year 2013/14 i.e. Rs. 2132.56 and lowest cash
flow amount is in fiscal year 2015/16 i.e. Rs. 312.12.
iv. Return on loan and advances ratio of NBL is fluctuating trend. The
highest ratio of NBL is 4.71% in the year 2016/17 and lowest ratio
0.95% in year 2015/16. The mean ratio is 2.79%.
 v. Return on total assets of NBL has fluctuating trend over the study
periods. The highest ratio of the bank is 2.79% in FY 2016/17 and
lowest ratio is 0.55% in FY 2015/16 respectively.
vi. Return on equity ratio of NBL is fluctuating trend over the study
periods. During the study period bank has maintained highest ratio is
58.67% in fiscal year 2016/17 and lowest ratio is 5.32% in the year
2014/15.
vii. It is found that coefficient of correlation between CFOA and CFIA
NBL is -0.39 which indicate low degree negative correlation between
CFOA and CFIA. There is insignificant relationship between CFOA
and CFIA.
viii. Coefficient of correlation between CFOA and CFFA of NBL is 0.12. It
shows the low degree positive correlation. There is insignificant
relationship between CFOA and CFFA.
ix. Correlation coefficient between CFIA and CFFA is 0.09. It refers that
there is very low degree positive correlation between these two
variables. Moreover, this relationship is insignificant because the
coefficient of correlation is lower than the value of 6PE.
x. Trend between actual values of NBL is fluctuating trend and forecasted
values are in the increasing trend. The increasing trend of CFOA of
NBL is aggressive and high but this result is negatively and
xi. CFIA of NBL actual value is in decreasing trend and the forecasted
value is also decreasing trend same as, the trend between actual value
and the forecasted value of CFFA is fluctuating type and the forecasted
value of CFFA is decreasing type.
 CHAPTER-III
SUMMARY AND CONCLUSION
3.1 Summary
This study attempts to analyze cash flow analysis of Nepal Bank Limited
under different headings with linking each other to provide the insight
knowledge to manage cash through application of cash flow analysis. The
main objective of the study was to examine financial position and
performance of NBL using ratios between different variables of the statement
of cash flows. As per the nature of the study, the published financial
statements of NBL from FY 2013/14 to 2017/18 have been collected. CFOA
of NBL is Rs. (1975.65), Rs. (7954.48), Rs. 2506.79, Rs. 6722.89 and Rs.
561.95 million respectively. CFIA of NBL is in appearing in negative over
the study periods form FY 2013/14 to FY 2017/18 i.e. Rs. (67.50), Rs.
(80.10), (89.59), Rs. (90.66) and (112.26) millions respectively. Every year
CFFA of NBL seems positive. The highest cash flow amount is in the fiscal
year 2013/14 i.e. Rs. 2132.56 and lowest cash flow amount is in fiscal year
2015/16 i.e. Rs. 312.12.
3.2 Conclusions
Every financial statement including cash flow statement using either direct or
indirect method. But they do not measure their performance using cash flows
ratios to get insight knowledge regarding cash. In this study, different kinds
of cash flows ratios as well as statistical tools are used to the performance of
Nepal Bank Limited. Return on loan and advances ratio of NBL is
fluctuating trend. The highest ratio of NBL is 4.71% in the year 2016/17 and
lowest ratio 0.95% in year 2015/16. The mean ratio is 2.79%. Return on total
assets of NBL has fluctuating trend over the study periods. The highest ratio
of the bank is 2.79% in FY 2016/17 and lowest ratio is 0.55% in FY 2015/16
respectively. Return on equity ratio of NBL is fluctuating trend over the
study periods. During the study period bank has maintained highest ratio is
58.67% in fiscal year 2016/17 and lowest ratio is 5.32% in the year 2015/16.
It is found that coefficient of correlation between CFOA and CFIA NBL is
-0.39 which indicate low degree negative correlation between CFOA and
CFIA. There is insignificant relationship between CFOA and CFIA.
Coefficient of correlation between CFOA and CFFA of NBL is 0.12. It
shows the low degree positive correlation. There is insignificant relationship
between CFOA and CFFA. Correlation coefficient between CFIA and CFFA
is 0.09. It refers that there is very low degree positive correlation between
these two variables. Moreover, this relationship is insignificant because the
coefficient of correlation is lower than the value of 6PE.
Trend of actual value of NBL is fluctuating trend and forecasted values are in
the increasing trend. The increasing trend of CFOA of NBL is aggressive and
high but this result is negatively and CFIA of NBL actual value is in
decreasing trend and the forecasted value is also decreasing trend same as,
the trend between actual value and the forecasted value of CFFA is
fluctuating type and the forecasted value of CFFA is decreasing type.
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Bajracharya, P. (2010). Managerial Accounting, Kathmandu: Asmita Books
Publishers & Distributors P. Ltd.
Dangol, R. M. (2009). Management Accounting, Kathmandu: Taleju
Prakasan.
Gyawali. A., (2010). Management Accounting, Kathmandu: Buddha
Academic Publishers & Distributors P. Ltd.
Joseph, D. (2008). Cash Flow Management and Small Business, Retrieve
Journals in July 30, 2008: http:// Articles.com/expert/136388.
Karki, S, (2017). Cash Management in Listed Manufacturing Companies:
Unilever Nepal Limited, Nepal Lube Oil Limited, Bottlers
Nepal Limited, Nepal Banaspati Ghee Limited & Raghupati
Jute Mills. Kathmandu: An Unpublished BBS Report submitted
to T. U.
Kothari, C. R. (2010). Research Methodology: Method and Technique, New
Delhi: Vishwa Prakashan.
Munakarmi, S. P. (2009). Management Accounting, Kathmandu: Buddha
Academic Publishers & Distributors P. Ltd.
Puri, B. L. (2017). Cash Flow Analysis of Nepal Telecom, Kathmandu: An
Unpublished BBS Report submitted to T. U.
http://doind.gov.np/index.php?
http://www.investopedia.com/articles/04/033104.asp
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Appendix –I
 Trend Analysis of CFOA of NIBL
FY (X) X x=X- X COFA (Y) x2 Xy
2013/14 1 -2 (1975.65) 4 3951.29
2014/15 2 -1 (7954.48) 1 7954.48
2015/16 3 0 2506.80 0 0.00
2016/17 4 1 6722.89 1 6722.89
2017/18 5 2 561.95 4 1123.90
N=5 ∑=15 ∑ Y =(138.49) ∑ x 2=10 ∑ xy=19752.57

Let trend line be

Y = a+bx ………………………….. (i)
Where
x= X- Middle Year
Here,
∑Y (138.49)
a= N
= 5
= (27.70)
∑ XY 19752.57
b= ∑ x2
= 10
= 1975.26
Subsyituting the values of 'a' and 'b', the equation of the trend line
Yc = (27.70)+1975.26x
For Trend Values
Year X=X-3 Trend Values
2013/14 -2 y=a+bx (3978.21)
2014/15 -1 y=a+bx1 (2002.95)
2015/16 0 y=a+bx2 (27.70)
2016/17 1 y=a+bx3 1947.56
2017/18 2 y=a+bx4 3922.82
2018/19 3 y=a+bx5 5898.07
2019/20 4 y=a+bx6 7873.33
2020/21 5 y=a+bx7 9848.59
2021/22 6 y=a+bx8 11823.84
2022/23 7 y=a+bx9 13799.10

Appendix –II
Trend Analysis of CFIA of NBL
 FY (X) X x=X- X CFIA(Y) x2 Xy
2013/14 1 -2 (67.50) 4 135.00
2014/15 2 -1 (80.10) 1 80.10
2015/16 3 0 (89.59) 0 0.00
2016/17 4 1 (90.66) 1 (90.66)
2017/18 5 2 (112.26) 4 (224.52)
N=5 ∑=15 ∑ Y =( 440.11) ∑ x 2=10 ∑ xy=(100.07)

Let trend line be

Y = a+bx ………………………….. (i)
Where
x= X- Middle Year
Here,
∑Y (440.11)
a= N
= 5
= (88.02)
∑ XY (100.07)
b= = = (10.01)
∑ x2 10
Subsyituting the values of 'a' and 'b', the equation of the trend line
Yc = (88.02)+(10.01)x
For Trend Values
Year X=X-3 Trend Values
2013/14 -2 y=a+bx (68.01)
2014/15 -1 y=a+bx1 (78.02)
2015/16 0 y=a+bx2 (88.02)
2016/17 1 y=a+bx3 (98.03)
2017/18 2 y=a+bx4 (108.04)
2018/19 3 y=a+bx5 (118.04)
2019/20 4 y=a+bx6 (128.05)
2020/21 5 y=a+bx7 (138.06)
2021/22 6 y=a+bx8 (148.07)
2022/23 7 y=a+bx9 (158.07)

Appendix –III
Trend Analysis of CFFA of NIBL
FY (X) X x=X- X Investment (Y) x2 Xy
 2013/14 1 -2 2132.56 4 (4265.12)
2014/15 2 -1 496.37 1 (496.37)
2015/16 3 0 312.12 0 0.00
2016/17 4 1 1245.78 1 1245.78
2017/18 5 2 1632.44 4 3264.88
N=5 ∑=15 ∑ Y =5812.28 ∑ x 2=10 ∑ xy=(250.83)

Let trend line be

Y = a+bx ………………………….. (i)
Where
x= X- Middle Year
Here,
∑Y 5812.28
a= N
= 5
= 1163.86
∑ XY (250.83)
b= = = (25.08)
∑ x2 10
Subsyituting the values of 'a' and 'b', the equation of the trend line
Yc = 1163.86+(25.08)x
For Trend Values
Year X=X-3 Trend Values
2013/14 -2 y=a+bx 1214.02
2014/15 -1 y=a+bx1 1188.94
2015/16 0 y=a+bx2 1163.86
2016/17 1 y=a+bx3 1138.77
2017/18 2 y=a+bx4 1113.69
2018/19 3 y=a+bx5 1088.61
2019/20 4 y=a+bx6 1063.52
2020/21 5 y=a+bx7 1038.44
2021/22 6 y=a+bx8 1013.36
2022/23 7 y=a+bx9 988.28