Analysis of income statement of Nepal Investment Bank Limited

Sadhana Maharjan

Westcliff University

BUS 535 Managerial Accounting

Presidential Business School

Professor. Mahata

Mr. Dilip Baral

March 8th, 2021

Activity 1

‘‘Nepal Investment Bank Ltd. (NIBL), previously Nepal Indosuez Bank Ltd., was established in

1986 as a joint venture between Nepalese and French partners. The French partner (holding 50%

of the capital of NIBL) was Credit Agricole Indosuez, a subsidiary of one of the largest banking

group in the world. Later in 2002, a group of Nepalese companies comprising of bankers,

professionals, industrialists and businessmen acquired the 50% shareholding of Credit Agricole

Indosuez in Nepal Indosuez Bank Ltd., and accordingly the name of the Bank also changed to

Nepal Investment Bank Ltd. At present, the Bank's shareholding pattern is as follows: Promoters

- 69% and General Public - 31%.’’ (Overview, n.d.) Being most preferred provider of financial

service in Nepal is the motive of NIBL.

Following is the screenshot of income statement of NIBL for five years (2072-2077).
Following is the organized income statement of NIBL for the latest fiscal year.

Income statement of NIBL

For the fiscal year 2019/2020
Particulars Amount(RS) Amount(RS)
Sales Revenue 17,586,363
Less: Cost of Goods Sold 9,423,657
Gross Profit 8,162,706
Less: Operating Expenses
Fees and Commission expenses 315,998
Other operating expenses 862,095
Depreciation and Amortization 259,301 (1,437,394)
Other Income and Expenses
Add: Other operating income 230,124
Non-operating income 3,317 233,441
Less: Impairment for loans and other

losses 1,997,245
Personal expenses 1,442,949
Non-operating expenses 6,288 (3,446,482)
Income before tax 3,512,271
Less: Current Year Tax 1,087,060
Deferred Tax Expenses 2,023 (1,089,083)
Net Profit 2,423,188
Here, calculation of sales revenue

Sales revenue= Interest income+ Fees and Commission income+ Net trading income

= 15,201,326+1,513,264+871,873

=17,586,363

Above is the income statement of NIBL for the fiscal year 2019/2020 which shows the profit of

RS2, 423,188 after paying tax. The bank has various expenses including non-operating expenses

which is later deducted from the gross profit. It shows the bank has invested in other sector

besides banking service as it includes other business income. The bank is in profit and able to

deal with COGS and other expenses.

The nature of each items are listed below.

Other business Other business

Sales Revenue Operating Expenses income expenses
Fees and Commission Other operating
Interest income expenses income Personal expenses
Fees and Commission Non-operating Non-operating
income Operating Expenses income expenses
Depreciation and
Net trading income Amortization

Abbreviations

NIBL-Nepal Investment Bank Limited

COGS-Cost of Goods Sold

References

(Overview, n.d.) https://nibl.com.np/aboutus/overview/overview?

fbclid=IwAR3awd5fB0UmGKq0oRpGQACMZQBadobUuGvxrQVfDLrchUBa6zrWbxOrnEU

Wild, J., & Shaw, K. (2019). Financial and managerial accounting: Information for decisions

(8th ed.). New York, NY:McGraw-Hill

Net Trading Revenue. (n.d). https://www.lawinsider.com/dictionary/net-trading-revenue

Loan Impairment Accounting. (December 16, 2020). How to Account for an Impaired Loan.

https://www.accountingtools.com/articles/loan-impairment-accounting.html

Annual Report.(2077).

https://www.nibl.com.np/public/Uploads/Documents/637293766984809672_Annual_Report_En

glish_2010-11.pdf