Basics of Financial Management

Assignment - 2

NOVEMBER 16, 2020

Submitted to: Prof. Manisha Sanghavi

Submitted by: Akhil M Vijayan

Roll Number: 11
Division: C
PRN: 20020441028
ABOUT THE COMPANY:
Introduction
Bank of Baroda (BANK OF BARODA) is an Indian multinational, public
sector banking and financial services company. It is the third-largest public
sector bank in India, with 131 million customers, a total business of US$218
billion, and a global presence of 100 overseas offices. Based on 2019 data, it is
ranked 1145 on the Forbes Global 2000 list. The government of India
announced the merger of Bank of Baroda, Vijaya Bank, and Dena Bank on
September 17, 2018, to create the country's third-largest lender. The
amalgamation is the first-ever three-way consolidation of banks in the country,
with a combined business of Rs14.82 trillion (short scale), making it the third-
largest bank after State Bank of India (SBI) and ICICI Bank.
The Maharaja of Baroda, Maharaja Sayajirao Gaekwad III, founded the
bank on July 20, 1908, in the Princely State of Baroda, in Gujarat. India
nationalized the bank and 13 other central commercial banks of India on July
19, 1969; the bank has been designated as a profit-making public sector
undertaking (PSU).

History
In 1908, Maharaja Sayajirao Gaekwad III set up the Bank of Baroda (Bank
of Baroda), with other stalwarts of industry such as Sampatrao Gaekwad, Ralph
Whitenack, Vithaldas Thakersey, Tulsidas Kilachand, and NM Chokshi. Two
years later, Bank of Baroda established its first branch in Ahmedabad. The bank
grew domestically until after World War II. In 1953, it crossed the Indian Ocean
to serve the communities of Indians in Kenya and Indians in Uganda by
establishing a branch each in Mombasa and Kampala. The next year it opened
a second branch in Kenya, in Nairobi, and in 1956, it opened a branch in
Tanzania at Dar-es-Salaam. Then in 1957, Bank of Baroda took a big step
abroad by establishing a branch in London. London was the center of the
British Commonwealth and the most important international banking center.
In 1958, Bank of Baroda acquired Hind Bank (Calcutta; est. 1943), which
became Bank of Baroda's first domestic acquisition.
 In 1961, Bank of Baroda acquired the New Citizen Bank of India. This
merger helped it increase its branch network in Maharashtra. Bank of Baroda
also opened a branch in Fiji. The next year it opened a branch in Mauritius. In
1963, Bank of Baroda acquired Surat Banking Corporation in Surat, Gujarat.
The next year Bank of Baroda acquired two banks: Umbergaon People's Bank
in southern Gujarat and Tamil Nadu Central Bank in Tamil Nadu state. In 1965,
Bank of Baroda opened a branch in Guyana. That same year Bank of Baroda
lost its branch in Narayanganj (East Pakistan) due to the Indo-Pakistani War of
1965. It is unclear when Bank of Baroda had opened the branch. In 1967, it
suffered a second loss of branches when the Tanzanian government
nationalized Bank of Baroda's three branches there (Dar es Salaam, Mwanga,
and Moshi) and transferred their operations to the Tanzanian government-
owned National Banking Corporation. In 1969, the Indian government
nationalized 14 top banks, including Bank of Baroda. Bank of Baroda
incorporated its operations in Uganda as a 51% subsidiary, with the
government owning the rest.
In 1972, Bank of Baroda acquired Bank of India's operations in Uganda.
Two years later, Bank of Baroda opened a branch each in Dubai and Abu Dhabi.
In India, in 1975, Bank of Baroda acquired the majority shareholding and
management control of Bareilly Corporation Bank (est. 1954) and Nainital Bank
(est. in 1922), both in Uttar Pradesh and Uttarakhand, respectively. Since then,
Nainital Bank has expanded to Uttarakhand, Uttar Pradesh, Haryana,
Rajasthan, and Delhi. Right now, Bank of Baroda has 99% shareholding in
Nainital Bank. International expansion continued in 1976 with the opening of a
branch in Oman and another in Brussels. The Brussels branch was aimed at
Indian firms from Mumbai (Bombay) engaged in diamond cutting and jewellery
having business in Antwerp, a major center for diamond cutting. Two years
later, Bank of Baroda opened a branch in New York and another in Seychelles.
Then in 1979, Bank of Baroda opened a branch in Nassau, the Bahamas.
In 1980, Bank of Baroda opened a branch in Bahrain and a
representative office in Sydney, Australia. Bank of Baroda, Union Bank of India,
and Indian Bank established IUB International Finance, a licensed deposit
taker, in Hong Kong. Each of the three banks took an equal share. Eventually
(in 1999), Bank of Baroda would buy out its partners. A second consortium or
joint-venture bank followed in 1985. Bank of Baroda (20%), Bank of India
(20%), Central Bank of India (20%), and ZIMCO (Zambian government; 40%)
established Indo-Zambia Bank in Lusaka. That same year Bank of Baroda also
opened an Offshore Banking Unit (OBU) in Bahrain (Gulf). Back in India, in
1988, Bank of Baroda acquired Traders Bank, which had a network of 34
branches in Delhi.
In 1992, Bank of Baroda opened an OBU in Mauritius but closed its
representative office in Sydney. The next year Bank of Baroda took over the
London branches of Union Bank of India and Punjab & Sind Bank (P&S). P&S's
branch had been established before 1970 and Union Bank after 1980. The
Reserve Bank of India ordered the takeover of the two following the banks'
involvement in the Sethia fraud in 1987 and subsequent losses. Then in 1992,
Bank of Baroda incorporated its operations in Kenya into a local subsidiary. The
next year, Bank of Baroda closed its OBU in Bahrain. In 1996, Bank of Baroda
Bank entered the capital market in December with an initial public offering
(IPO). The Government of India is still the largest shareholder, owning 66% of
the bank's equity. In 1997, Bank of Baroda opened a branch in Durban. The
next year Bank of Baroda bought out its partners in IUB International Finance
in Hong Kong. This was a response to regulatory changes following Hong
Kong's reversion to the People's Republic of China. The new wholly-owned
subsidiary became Bank of Baroda (Hong Kong), a restricted license bank. Bank
of Baroda also acquired Punjab Cooperative Bank in a rescue. Bank of Baroda
incorporates a wholly-owned subsidiary, BANK OF BARODA Capital Markets,
for broking business. In 1999, Bank of Baroda merged with Bareilly Corporation
Bank in another rescue. At the time, Bareilly had 64 branches, including four in
Delhi. In Guyana, Bank of Baroda incorporated its branch as a subsidiary, Bank
of Baroda Guyana. Bank of Baroda added a branch in Mauritius and closed its
Harrow Branch in London.
In 2000, Bank of Baroda established the Bank of Baroda (Botswana). The
bank has three banking offices, two in Gaborone, and one in Francistown. In
2002, Bank of Baroda converted its subsidiary in Hong Kong from a deposit-
taking company to a Restricted License Bank. Bank of Baroda acquired Benares
State Bank (BSB) at the Reserve Bank of India's request. BSB was established in
1946 but traced its origins back to 1871 and its function as the Benares state's
treasury office. In 1964, BSB had acquired Bareilly Bank (est. 1934), with seven
branches in western districts of Uttar Pradesh; BSB also had taken over
Lucknow Bank in 1968. The acquisition of BSB brought Bank of Baroda 105 new
branches. Lucknow Bank, a unit bank with its only office in Aminabad, had
been established in 1913. In 2002, Bank of Baroda listed Bank of Baroda
(Uganda) on the Uganda Securities Exchange (USE). The next year Bank of
Baroda opened an OBU in Mumbai. In 2004, Bank of Baroda acquired the failed
south Gujarat Local Area Bank. Bank of Baroda also returned to Tanzania by
establishing a subsidiary in Dar-es-Salaam. Bank of Baroda also opened a
representative office each in Kuala Lumpur, Malaysia, and Guangdong, China.
In 2005, Bank of Baroda built a Global Data Centre (DC) in Mumbai for running
its centralized banking solution (CBS) and other applications in more than
1,900 branches across India and 20 other counties where the bank operates.
Bank of Baroda also opened a representative office in Thailand. In 2006, Bank
of Baroda established an Offshore Banking Unit (OBU) in Singapore. In 2007, its
centenary year, Bank of Baroda's total business crossed 2.09 trillion (short
scale), its branches crossed 2000, and its global customer base 29 million
people. In Hong Kong, Bank got Full Fledged Banking license, and the business
of its Restricted License Banking subsidiary was taken over Bank of Baroda
branch in Hong Kong with effect from 01.04.2007. In 2008, Bank of Baroda
opened a branch in Guangzhou, China (02/08/2008) and Kenton, Harrow,
United Kingdom. Bank of Baroda opened a joint venture life insurance
company with Andhra Bank and Legal & General (UK) called IndiaFirst Life
Insurance Company. In 2009, Bank of Baroda (New Zealand) was registered. As
of 2017, Bank of Baroda (NZ) has three branches: two in Auckland and
Wellington. In 2010, Malaysia awarded a commercial banking license to a
locally incorporated bank to be jointly owned by Bank of Baroda, Indian
Overseas Bank, and Andhra Bank.
In 2011, Bank of Baroda opened an Electronic Banking Service Unit
(EBSU) at Hamriya Free Zone, Sharjah (UAE). It also opened four new branches
in existing operations in Uganda, Kenya (2), and Guyana. Bank of Baroda closed
its representative office in Malaysia in anticipation of the opening of its
consortium bank there. Bank of Baroda received 'In Principle' approval to
upgrade its representative office in Australia to a branch. Bank of Baroda also
acquired Mumbai-based Memon Cooperative Bank, which had 225 employees
and 15 branches in Maharashtra and three in Gujarat. It had to suspend
operations in May 2009 due to its precarious financial condition. The
Malaysian consortium bank, India International Bank Malaysia (IIBM), finally
 opened in Kuala Lumpur, a large population of Indians. BANK OF BARODA owns
40%, Andhra Bank owns 25%, and IOB the remaining 35% of the share capital.
IIBM seeks to open five branches within its first year of operations in Malaysia
and intends to grow to 15 branches within the next three years. On 17
September 2018, the Government of India proposed the merger of Dena Bank
and Vijaya Bank with the Bank of Baroda, pending approval from the boards of
the three banks. The merger was approved by the Union Cabinet and the
boards of the banks on 2 January 2019. Under the terms of the merger, Dena
Bank and Vijaya Bank shareholders received 110 and 402 equity shares of the
Bank of Baroda, respectively, of face value ₹2 for every 1,000 shares they held.
The merger came into effect on 1 April 2019. Post-merger, the Bank of Baroda
is the third largest bank in India, after State Bank of India and HDFC Bank. The
consolidated entity has over 9,500 branches, 13,400 ATMs, 85,000 employees,
and serves 120 million customers.
Bank of Baroda announced in May 2019 that it would either close or
rationalize 800–900 branches to increase operational efficiency and reduce
duplication post-merger. The regional and zonal offices of the merged
companies would also be closed. PTI quoted an unnamed senior bank official
as stating that Bank of Baroda would expand in eastern India as it already had
a strong presence in the other regions.

Subsidiaries

1. BOB Capital Markets (BOBCAPS) is a SEBI-registered investment

banking company based in Mumbai, Maharashtra. It is a wholly owned
subsidiary of Bank of Baroda. Its financial services portfolio
includes initial public offerings, private placement of debts,
corporate restructuring, business valuation, mergers and
acquisition, project appraisal, loan syndication, institutional equity
research, and brokerage.
2. The Nainital Bank Ltd. (98.57%) was established in the year 1922 with
the objective to cater banking needs of the people of the region. In the
year 1973, Reserve Bank of India directed Bank of Baroda, to manage
the affairs of the Nainital Bank Limited.
3. BOB Financial Solutions Limited.
4. Baroda Asset Management India Limited.
5. India First life Insurance Company Limited (44%).
 6. India Infradebt Limited (40.99%).
7. BOB (UK) Limited.
8. Baroda Global Shared Services Ltd.

Vision:
To be a top-ranking National Bank of International Standards committed
to augmenting stake holders' value through concern, care and competence.

The Future

Revolutionary and discontinuous changes in the operating environment

are stark reminders that business success is 'impermanent'. Bank has achieved
substantial progress in technology and is continuously integrating multiple
platforms of technology to generate synergies. Bank continuously attempts to
adapt to the dynamic economic environment while engaging in long term
relationships to provide superior customer service.
Bank’s constant endeavour to delight its customers, which is built on its
strong fundamentals will make it stronger, more resilient and enable to achieve
its vision of to be the Most Admired Bank.

Management
Name Designation
Shri Sanjiv Chadha Managing Director & CEO
Dr. Hasmukh Adhia Non-Executive Chairman
Shri Murali Ramaswami Executive Director
Shri S. L. Jain Executive Director
Shri Vikramaditya Singh Khichi Executive Director
Shri Ajay K Khurana Executive Director
Shri Amit Agrawal GOI Nominee Director
 Shri Ajay Kumar RBI Nominee Director
Smt. Soundara Kumar Shareholder Director
Dr.Bharatkumar D.Dangar Shareholder Director
Shri Srinivasan Sridhar Shareholder Director
Shri Biju Varkkey Non-Executive Director

Recent Issues
On the 4 September 2017 the South Africa Financial Intelligence Centre
fined Bank of Baroda ₹ 11 million (equivalent to US$837,000) for flouting anti-
corruption laws in transactions on accounts owned by the Gupta family.
Following the flagging of 36 suspicious transactions through Gupta-family-owned
accounts over a ten-month period valued at ₹4.2 billion, the bank tried to close
the accounts. The Gupta family has filed an interdict against the bank to prevent
it from closing their accounts. During February 2018, it was announced that the
Bank of Baroda has given notification to the South African Reserve Bank that it
will be exiting the country.

Authorized Issued
Period Instrument -PAIDUP-
Capital Capital
Face
From - To   (Rs. cr) (Rs. cr) Shares (nos) Capital
Value
Equity
2019 - 2020 3000 926.85 4,62,05,66,586 2 924.11
Share
Equity
2018 - 2019 3000 531.84 2,64,55,16,132 2 529.1
Share
Equity
2017 - 2018 3000 529.1 2,64,55,16,132 2 529.1
Share
Equity
2016 - 2017 3000 463.57 2,30,41,59,598 2 460.83
Share
Equity
2015 - 2016 3000 462.09 2,31,04,65,500 2 462.09
Share
Equity
2014 - 2015 3000 445.03 2,21,14,95,906 2 442.3
Share
Equity
2013 - 2014 3000 432.15 42,94,15,087 10 429.42
Share
Equity
2012 - 2013 3000 423.99 42,12,56,303 10 421.26
Share
Equity
2011 - 2012 3000 413.86 41,11,23,383 10 411.12
Share
 Equity
2010 - 2011 3000 394.28 39,15,46,079 10 391.55
Share
Equity
2009 - 2010 3000 367 36,42,66,500 10 364.27
Share
Equity
2008 - 2009 1500 367 36,42,66,500 10 364.27
Share
Equity
2007 - 2008 1500 367 36,42,66,400 10 364.27
Share
Equity
2006 - 2007 1500 367 36,42,66,000 10 364.27
Share
Equity
2005 - 2006 1500 367 36,42,65,500 10 364.27
Share
Equity
2004 - 2005 1500 296 29,32,65,400 10 293.27
Share
Equity
2003 - 2004 1500 296 29,32,61,700 10 293.26
Share
Equity
2002 - 2003 1500 296 29,60,00,000 10 296
Share
Equity
2001 - 2002 1500 296 29,60,00,000 10 296
Share
Equity
2000 - 2001 1500 296 29,60,00,000 10 296
Share
Equity
1999 - 2000 1500 296 29,60,00,000 10 296
Share
Equity
1998 - 1999 1500 296 29,60,00,000 10 296
Share
Equity
1997 - 1998 1500 296 29,60,00,000 10 296
Share
Equity
1996 - 1997 1500 388.46 20,35,37,400 10 203.54
Share
Equity
1995 - 1996 1500 740.94 74,09,35,900 10 740.94
Share

CAPITAL STRUCTURE

SHAREHOLDING PATTERN:
 General information about company
Scrip code 532134
NSE Symbol BANKBARODA
MSEI Symbol NOTLISTED
ISIN INE028A01 039
Name of the company BANK OF BARODA
Whether company is SME No
Class of Security Equity Shares
Type of report Quarterly
Quarter Ended / Half year ended/Date
30-06-2020
of Report (For Prelisting / Allotment)
Date of allotment / extinguishment (in
case Capital Restructuring selected) /  
Listing Date
Shareholding pattern filed under Regulation 31 (1) (b)

Declaration
Mr. Particular Yes/No Promoter and Public Non-Promoter-
Promoter Group shareholder Non-Public
NO.

Whether the Listed Entity has issued any partly No

No No No
paid U shares?
 Whether the Listed Entity has issued any
2 No No No No
Convertible Securities?
3 Whether the Listed Entity has issued any No No No No
Warrants?
Whether the Listed Entity has any shares
4 No No No No
against which depository receipts are
issued?
5 Whether the Listed Entity has any shares in Yes Yes Yes No
locked-in?
Whether any shares held by promoters are No No
6 pledge or otherwise encumbered?
Whether company has equity shares with No
7 No No
differential voting
rights?
Whether the listed entity has any significant No
8 beneficial
owner?

SHARE PRICE ANALYSIS

 Graphs showing Share Price Analysis of Bank of Baroda from 2015-16 to
2019-20

INTRODUCTION
 Today in the financial world, finance is an inevitable factor in the
operation of a firm. Finance is also known as the lifeblood of a business.
Therefore, financial performance analysis of a firm is a mundane amongst the
perspective of various stakeholders, be it in the management, leaders, owners
and investors. Financial analysis is a process of synthesis and summarization of
financial and operative data with a view to get an insight into the operating
activities of a business enterprise which is done from the analysis of the
financial statements. Financial statements are the summarised statements and
reports, the Balance sheet reflecting the assets and liabilities and the Income
statement showing the results of operations during a certain period, prepared
by the business concerns to disclose their accounting information and to
communicate them to the interested parties. Financial performance analysis is
crucial for taking financial decisions relating to planning and control. It is the
process of determining the operating and financial characteristics of a firm
from accounting and financial statements. It may be done for a variety of
purposes, which may range from a simple analysis of the short-term liquidity
position of the firm to a comprehensive assessment of the strengths and
weaknesses of the firms in various areas. It is helpful in assessing corporate
excellence, judging credit worthiness, forecasting bond ratings, predicting
bankruptcy and assessing market risks.

SCOPE OF THE STUDY

The present study relates to the financial performance of the Bank of
Baroda in India. It is designed to analyse the financial performance of Bank of
Baroda. The study based on the annual reports of the company for the period
of five financial years starting from 2016-17 to 2018-19. It includes Liquidity,
Profitability, Leverage, Turnover and Market-based ratio performance of Bank
of Baroda.

LIMITATIONS
 1. The study exclusively depends on the published financial data, so it is
subject to all limitations that are inherent in the published financial
statements.
2. The study is confined to five financial years data only (2016-17 to 2018-
19). Detailed analysis covering a lengthy period, which may give slightly
different result, has not been made.
3. It may be possible that the secondary data collected from the annual
reports of the Bank of Baroda may be window dressed which does not
show the actual position of the bank.
4. The secondary data was collected from the website
www.moneycontrol.com. So, the quality of the study depends upon the
accuracy, reliability and quality of the secondary data source.
5. All the limitations of ratio analysis and common size balance sheet are
applicable to this study.

RATIO ANALYSIS

Ratio analysis is the analysis of financial statements with the help of

ratios. Ratio analysis does not provide an end in itself, but only a means to
understand the financial position and performance of business concerned.
Ratio is defined as “Simply one number expressed in terms of
another”.

Advantages of Ratio Analysis

 To measure the profitability of the business by calculating the various
profitability, liquidity and solvency ratios.
 Ratio analysis helps in the analysis of financial statement.
 Ascertaining the relationship between various items.
 Helpful in comparative analysis (intra and inter firms) of the
performance.
 Helps in simplifying the accounting information; summarizing the
complicated data.
  Helps to work out the short-term financial position of the company with
the help of liquidity ratios.
 To indicate the trend of the business, which is useful for estimating
future.
 Helps in control, by comparing actual ratios with standard values.

Limitations of Ratio Analysis
There are certain limitations of the ratio analysis techniques and they
should be kept in mind while using them in interpreting financial statements.
The following are the main limitations of accounting ratios:
 Limited Comparability: Different firms apply different accounting polic
ies.
Therefor the ratio of one firm cannot always be compared with the ratio
of another firm.
 False Results: Accounting ratios are based on data drawn from accounting
records. In case that data is correct, then only the ratios will be correct.
 In order to cover up their bad financial position some companies resort to
window dressing.
 Ratio analysis is a costly technique and can be used by big business hous
es only. Small business units are not able to afford it.
 Ratio analysis is affected by personal bias.

CLASSIFICATION OF RATIOS
1. Statement wise classification: This classification is based on the
statement from which items are taken.

 Balance Sheet Ratios

 Income Statement Ratios
 Combined Ratios

2. Classification according to importance: It is evident that some ratios are

more important than others. This classification has been recommended
by the British Institute of Management.
 Primary Ratios
  Secondary Ratios

3. Classification according to nature: This mode of classification includes in

its fold four different types of accounting ratios.

 Liquidity Ratios
 Leverage Ratios
 Profitability Ratios
 Overall Profitability Ratios
 Activity Ratios

Current Ratio
The Current Ratio is used to measure a Company's short-term liquidity
position and is calculated as a ratio of Current Assets to Current Liabilities. The
ideal Current Ratio is 2:1.

Current Ratio during 5 Years

Financial Year Current Ratio

2014 – 15 0.19
2015 – 16 0.21
2016 – 17 0.22
2017 – 18 0.28
2018 – 19 0.29

During the review period from FY 2014-15 to 2018- 19, it was observed
that Current Ratio in 2015-16 was 0.19 which increased in 2016-17 to 0.21 and
continued to increase in the subsequent two years. In 2018-19, again there
was an increase in the ratio from 0.28 to 0.29, with the graph showing an
overall growth from FY 2014-15 to FY 2018-19. An overall steady growth was
observed from FY 2014-15 to FY 2018-19.

Quick / Liquid Ratio

The Quick Ratio is used to assess the short-term liquidity position of
the concern. It is the ratio of Quick Assets to Current Liabilities. The ideal
Quick Ratio is 1:1.

Quick Ratio during 5 Years

Financial Year Quick Ratio

2014 – 15 5.71
2015 – 16 5.83
2016 – 17 5.09
2017 – 18 10.58
2018 – 19 10.52

The Financial Performance of Quick Ratio during the review period from
FY 2014-15 to 2018-19. We observed that Quick Ratio in 2014-15 was 5.71
which increases in 2015- 16 to 5.83 showing a percentage increase of 2.1%. In
2016-17, it decreased to 5.09 showing a negative growth of (12.69%). In 2017-
18, there is an increase of 107.85% in Quick Ratio and in 2018-19, the rate of
change decreased at a rate of (0.56) %. Across the review period, the
maximum Quick Ratio is 10.58 and the minimum Quick Ratio is 5.09.
 Net Profit Ratio

The Net Profit Ratio is the ratio of Net Profit to Revenue from
Operations. This ratio is used to measure overall profitability of the concern.
Net Profit Ratio of THE Bank during the review period from FY 2014-15 to
2018-19 was assessed.

Net Profit Ratio during 5 years

Financial Year Net Profit Ratio

2014 – 15 15.32
2015 – 16 (23.35)
2016 – 17 5.99
2017 – 18 (9.17)
2018 – 19 1.63

During the 5-year period, Net Profit Ratio was decreasing. We observed
that Net Profit Ratio in 2014-15 was 15.32, which decreases in 2015-16 to
(23.35) showing a percentage decrease of (252.4%). In 2016-17, it increased to
5.99. During 2017-18, the ratio decreases showing a percentage change of
253.2% and in 2018-19, it further increased to 1.63.

Core Operating Profit

Operating Profit is the income earned from the core operations of a
business, excluding any financing or tax related issues. The concept is used to
investigate the profit-making potential of a business, excluding all extraneous
factors.
 Core Operating Profit during 5 years

Financial Year Amount (Rs in

billion)
2014 - 15 (23.59)
2015 - 16 (12.73)
2016 - 17 (20.82)

2017 - 18 (11.77)
2018 - 19 (12.85)

Operating Profit of Bank of Baroda from FY 2014-15 to 2018-19 was

analysed. During 2014-15, the Operating Profit was (23.59) and it increased to
(12.73) in 2015-16 showing a percentage increase of 85.37%. In 2016-17, the
rate of change decreased to (20.82%). During the subsequent two years, the
rate of change increased to 76.89% and decreased to (9.17) % respectively.

Return on Net Worth Ratio

Return on Net Worth is used to measure the profitability of the
company. This is calculated by dividing the net income of the firm by
shareholders’ equity.
 Return on Net Worth Ratio during 5 years

Financial Year Return on Net

Worth
2014 – 15 14.45
2015 – 16 11.15
2016 – 17 10.03
2017 – 18 7.16
2018 – 19 3.82

Return on Net Worth was analysed during the review period. It was
observed that during 2014-15, the Return on Net Worth stood at 14.45 in
2015-16 and it decreased to 11.15 showing a percentage of negative growth of
(22.84%). In 2016-17, it decreased to 10.03 and percentage of growth
decreased to (10.04%). In 2017-18, it decreased to 7.16 and in 2018-19 it was a
decreased to 3.82 showing a negative growth of (46.65%). During the five-year
period, the Return on Net Worth of the Bank showed a negative growth of
(73.56%).

Dividend Pay-out Ratio

Dividend Pay-out Ratio measures the relationship between the earnings
belonging to the equity shareholders and dividend actually paid to them.
The below table indicates the dividend pay-out ratio of Bank of Baroda
during the review period from FY 2014-15 to 2018-19. It was observed that
during 2014-15, the ratio stood at 27.65 and in 2015-16, it increased to 34.00
showing an increase of 22.97% of growth rate. In 2016-17, the ratio declines to
2.24 and the percentage of growth also decreased to (93.41%). During 2017-
18, the ratio was increased to 21.92 showing a higher growth rate of 878.57%.
In 2018-19, it increased to 27.23 and the percentage of growth declines to
 24.22%. During the five-year period, the Dividend Pay-out Ratio of the Bank
showed an average negative growth of (1.52%).

Dividend Pay-out Ratio during 5 years

Financial Dividend Pay-out

Year Ratio
2014 - 15 27.65
2015 - 16 34.00
2016 - 17 2.24
2017 - 18 21.92
2018 - 19 27.23

Total Deposits
Total Deposits is a term included in the balance sheet of a bank. To a
common person, the word “Deposit” most often implies the act of placing your
money in the safety of a bank. While calculating Total Deposits from a bank's
perspective various kinds of deposits like Demand deposits, Term deposits,
Interest and Non-interest-bearing deposits etc. are added together to
determine the total deposits.
Total Deposits of the Bank from FY 2014-15 to FY 2018-19 was assessed.
It was found that during the review period there was a steady increase in
deposits. During 2014-15, the Deposits were 3615.63 and it increased to
4214.26 showing an increase of 16.56%. The rate of change decreased during
subsequent two years to 16.28% and 14.48%. In 2018-19, it again increased to
16.39%. The average growth of total deposits during the five years was
80.58%.
 Total Deposits during 5 Years

Financial Current Savings Term

Year Account Account Deposit Total

2014 – 15 495.20 1148.60 1971.83 3,615.63

2015 – 16 588.70 1342.30 2283.26 4,214.26
2016 – 17 749.83 1718.39 2432.17 4,900.39
2017 – 18 889.58 2009.67 2710.50 5,609.75
2018 – 19 962.70 2276.71 3289.79 6,529.20

FINDINGS:
The financial statement analysis is the process of reviewing and
analysing a company's financial statement to make better investment
decisions. The study is based on financial statement such as ratio analysis and
common size balance sheet. The aim of the study is to evaluate the financial
position, the operational result as well as financial progress of Bank of Baroda.
The performance of the Bank was analysed during the five-year review period
starting from FY 2014-15 to FY 2018-19.

The major findings were:

1. From FY 2014-15, the Current Ratio of Bank of Baroda showed an overall
upward growth.
2. During the review period, the Quick Ratio of the Bank showed a mixed
trend.
3. The Net Profit Ratio and Return on Net Worth of Bank of Baroda was
found to be consistently decreasing in each year and showing a
downward trend.
4. From FY 2014-15 to FY 2018-19, the Core Operating Profit of Bank of
Baroda showed an overall decline with an average growth of (16.35) %.
5. The Dividend Pay-out Ratio of Bank of Baroda during the 5-year review
period showed an overall growth except in FY 2016-17, experiencing a
sudden dip and then showing steady growth.
6. The Total Deposits of the Bank showed an upward trend during the five-
year review period with an average growth of 80.58% and 51.38%
respectively.

REFERENCES:

1. https://www.moneycontrol.com/financials/bankofbaroda/ratiosVI/BOB
/1#BOB
2. https://www.bankofbaroda.in/annual-report.htm
 Annual Report 2018-19
 Annual Report 2017-18
 Annual Report 2016-17
 Annual Report 2015-16

3. https://en.wikipedia.org/wiki/Bank_of_Baroda
4. https://www.financialexpress.com/market/stock-market/bank-of-
baroda-stock-price/
5. https://economictimes.indiatimes.com/bank-of
baroda/stocks/companyid-12040.cms