1

CHAPTER I
INTRODUCTION

1.1. Background of the Study

Financial analysis is a subjective measure of how well a firm can use assets from its primary
mode of business and generate revenues. The term is also used as a general measure of a
firm's overall financial health over a given period. Analysts and investors use financial
performance to compare similar firms across the same industry or to compare industries or
sectors in aggregate. There are many stakeholders in a company, including trade creditors,
bondholders, investors, employees, and management. Each group has its own interest in
tracking the financial performance of a company. The financial performance identifies how
well a company generates revenues and manages its assets, liabilities, and the financial
interests of its stake- and stockholders. There are many ways to measure financial
performance, but all measures should be taken in aggregate. Line items, such as revenue from
operations, operating income, or cash flow from operations can be used, as well as total unit
sales. Furthermore, the analyst or investor may wish to look deeper into financial statements
and seek out margin growth rates or any declining debt. Six Sigma methods focus on this
aspect. (Bajracharya, B.B. 1980)
A liquid firm is a firm that can meet its various short-term debt and credit obligations. Those
who extend credit to a firm are particularly concerned with the firm’s liquidity. It is not
unusual for a firm to show a profit on its income statement but still not have sufficient cash to
pay creditors—that is, the firm has an unhealthy liquidity ratio. The following liquidity ratios
point out problems of this nature. There is a great deal of disagreement among analysts as to
how liquid a firm should be. It is not necessarily bad for a firm to have low current and quick
ratios if the firm is able to meet its obligations. A cooperative, often shortened to “co-op,” is a
business that is owned and operated by and for the benefit of its members. A cooperative is
formed when several people identify an unmet need. For example, artisans in a downtown area
might see the need for a conveniently located market; freelancers might identify the need for a
co-working space. Potential members then conduct cost and feasibility studies and explore
financing possibilities. (Gitman. L.J. 2005)
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1.2 Organization Profile

Shree Tripureshwar Saving and Credit Co-operative Limited is a prominent financial
institution in Nepal, established with the aim of providing a range of financial services to its
members. Founded in the heart of Kathmandu, this cooperative plays a crucial role in
promoting financial inclusion and socio-economic development in the region. Its foundation is
rooted in the principles of cooperative banking, which emphasizes mutual aid, collective
ownership, and democratic governance.The primary objective of Shree Tripureshwar Saving
and Credit Co-operative Limited is to provide accessible financial services to its members.
This includes savings accounts, credit facilities, and other financial products designed to
enhance the economic well-being of individuals and families. The cooperative operates with a
vision of fostering financial stability and empowerment among its members, thereby
contributing to the broader economic development of the community.Shree Tripureshwar
Saving and Credit Co-operative Limited is deeply committed to the socio-economic
development of the community it serves. Through its financial services, the cooperative has
empowered numerous individuals and families, enabling them to achieve their financial goals
and improve their quality of life. Additionally, the cooperative actively participates in various
community development initiatives, such as financial literacy programs, health camps, and
vocational training workshops.

1.3. Statement of problem

Shree Tripureshwar Saving and Credit Cooperative Limited, like many cooperatives in Nepal,
plays a significant role in providing financial services to its members, fostering economic
growth, and contributing to the community's well-being. Financial statement analysis is a
critical tool for assessing the financial health, performance, and sustainability of such
institutions. However, the financial statements of Shree Tripureshwar Saving and Credit
Cooperative Limited have not been thoroughly analyzed in recent years, leading to potential
gaps in understanding its financial stability and operational efficiency.

The research attempts to answer the following questions:

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 How Tripureshwar saving and credit cooperative limited is managing its liquidity or
loss?
 Do Tripureshwar saving and credit cooperative company enhance the performance of
organizations?

1.4. Objectives of the Study

The Specific objectives of the study are as follows:
 To analyze the financial performance of the Tripureshwar Saving and Credit Co-
operative.
 To examine condition of Tripureshwar Saving and Credit Cooperative.
in terms of liquidity since five year.

1.5. Rationale of the Study

Every study has its own significances and importance. This study has the following
significances:
 This study will be helpful to find out the analysis of financial accounting through different
financial ratios of TSCC.
 The study will be significant to those who wish to carry out the report on liquidity analysis
of other co-operative.
 The study will serve as a guideline to other students and researchers to carry out the report
on the same field.

1.6 Review of Literature

The literature review is the study of previous research works and books with the purpose of
knowing the research issues in details and find out the appropriate methodology. The main
purpose of literature review is to find out what works have been done in the area of the
research problem under study and what works have been done in the field of books, reports,
journals and research studies published by various institutions, unpublished dissertations
submitted by bachelor. The main purpose of literature review is to convey what knowledge
and ideas has been established on the topic on past and what are their strength and weakness.
 4

 Conceptual Framework
 Review of Previous Studies
 Research Gap

1.6.1 Conceptual Framework

Various books are reviewed which are related with topic, which may be helpful to understand
clearly about the Subject matter. The objectives of this section are to how various writers have
described about financial statement analysis research. The review of textbook and other
reference materials such as newspaper, magazines, research articles, journals and past
thesis/reports have been included in this topic. This study is totally based on the study
financial stamen analysis of a co-operative institutions. These ratios are used to quality the
relationship between two or more sets of financial data either from income statement or from
balance sheet. Types of financial ratios are:

 Current ratios
 Quick ratios
 Liquidity analysis

Current Ratio
Measure the company’s ability to pay short-term liabilities such as payable accounts and short-
term loans, which represents the ratio of current assets to current liabilities. The magnitude of
this ratio expresses high liquidity of the company, thus a greater capacity to meet the short-
term liabilities. In contrast, decrease in the ratio under (1) expresses the deficit of liquidity and
the part of the fixed assets financed by short-term debt. Although liquidity deficit could lead to
a decline in the company’s energy, thus can affect profitability. If the ratio (1) means that
current assets equal to current liabilities (Robinson et al., 2015).

Current ratio which provide the best single indicator which the claims of short term creditors
are covered by assets that are expected to be converted to cash in a period roughly
corresponding to the maturity of the claims. This is the most commonly used ratio in the
analysis of financial statements. It gives the analyst a general picture of the adequacy of the
working capital of company and of the company’s ability to meet its day to day payment
obligations. As current obligation and commitments are directly related to working capital,
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this ratio is aptly called working capital ratio. Current ratio is not only the measure of the
company’s liquidity but also is a measure of the margin of safety that management maintains
in order to allow for the inevitable unevenness in the flow of funds through the current asset
and liability accounts (Anthony at el., 2010) The current ratio is the true indicator of liquidity
since it considers the overall magnitude of each fund (Gitman, 2005). It is a relative measure
of liquidity which can be used for the purpose of inter-firm comparison. Thus this ratio is
generally recognized as the patriarch among ratios.

Quick Ratio
This ratio only includes the most liquid of current assets to current liabilities. The rise in the
value of this ratio expresses high liquidity of the company. This ratio excludes prepaid
expenses and inventory from current assets being difficult conversion into cash. The quick
assets are defined as those assets which are quickly convertible into cash. While calculating
quick assets we exclude the inventories at the end and other current assets such as prepaid
expenses, advance tax, etc., from the current assets. Because of exclusion of non-liquid current
assets it is considered better than current ratio as a measure of liquidity position of the
business. It is calculated to serve as a supplementary check on liquidity position of the
business and is therefore, also known as ‘Acid-Test Ratio’. The ratio provides a measure of
the capacity of the business to meet its short-term obligations without any flaw. Normally, it is
advocated to be safe to have a ratio of 1:1 as unnecessarily low ratio will be very risky and a
high ratio suggests unnecessarily deployment of resources in otherwise less profitable short-
term investments. (Sinha, 2012)

Liquidity Analysis

Computation and analysis of the liquidity are made by a system of ratios. These liquidity ratios
characterize the financial situation of the company, its capacity to generate adequate cash for
payments. The data on which the liquidity ratios are computed can be found within the
components of financial statements: balance-sheet, profit and loss account, cash flow
statement and notes. Usually, the company’s liquidity is measured by comparing the value of
the current assets with the value of the current liabilities (on short-term). The current assets is
represented by the cash and other assets that are expected to be realized in cash or sold or
consumed within one year (or the normal operating cycle of the company if greater than one
 6

year). Current assets category includes: inventories, accounts receivable, short-term

investments, cash and cash equivalents, as well as prepaid expenses. If current assets include
items that have a life cycle that is longer than twelve months, the sums that are assigned to the
next financial year must be disclosed into the notes. Short-term investments must be presented
as current assets only if they are expected to be sold in less than twelve months (even these
titles have a higher liquidity, the intention of the management is prior to their liquidity
potential). Current liabilities are obligations expected to be satisfied within a relatively short
period of time, usually one year. Typically, these include: accounts payable, short-term loans
(includes bank overdrafts and all other interest-bearing short-term debts), accrued payments,
interest, current tax and dividends due. Liquidity ratios, as any other ratios that are used in
financial analysis, are not relevant as absolute values. They must be computed and interpreted
for a longer period of time (that must allow to observe the trend over time for the analyzed
entity) or by comparisons through different entities. Analyzing the trend over time for a certain
company or the comparison among different companies is often enlightening. (Wild,
Subramanyam & Halsey, 2007)

1.6.2 Review of previous studies

This Study, the several researchers have found various studies regarding financial statement
analysis of co-operative of company. In this study, only relevant subject matters are reviewed
which are as follows:

Neupane (2006) in ' Development of Co-operative in Nepal' explained that cooperative can
play vital role in the Nepalese economy though they have very poor contribution in the
economy at present. If management and business operation capacities are improved, there
could be better prospects for the cooperatives. Successful cooperative enterprises can generate
higher prospects of employment, economic surplus, which leads to poverty alleviation. In this
study it is also suggested that there should be an honest leadership value based professional
management, which could capitalize the interests of cooperative to a success in large scale.

Bastola (2008) in Co-operative Movement and Its Impact stated that cooperatives not only
generate income to its member but also taken overall responsibility of them. In Nepal
multipurpose cooperative are in practice, they inspire the villagers for modern agriculture
system, to grow off seasonal vegetable and professional animal husbandry. They promote the
 7

product in market and arrange the sales it reasonable rate. Besides this, cooperative is working
for social welfare also. It is acting for the development of leadership skills of the women
informal education providing health service through health campaign and other skill-oriented
training is also given to rural women. Thus cooperative organizations are bringing
revolutionary change to the life of rural woman.

Sharma (2009) in thesis "Co-operative and the Improvement of the Socio Economic
Condition'', concluded that cooperative plays vital role for the improvement of the socio
economic condition of the people. Firstly, fostering feeling among rural farmers. Secondly,
providing marketing facilities to rural milk producers and thirdly, providing saving and credit
facilities to the rural poor farmer. Dairy cooperatives have made the farmers to unite
themselves in groups and they have feeling of togetherness. This sector has significant impact
on the quality of life. Number of people has changed their patterns of life as well as their mode
of living. This has been measured during study by analyzing their socio-economic status, and
their awareness level. Through the study the researcher has found that this dairy farming has
lot of potentiality instead of having lot of problems in this sector, like-lack of institutional
facilities, veterinary facilities, animals health, insurance low price of milk, milk holidays,
subsistence level of farming etc. these problems hinders in development of this sector but
these problems have solution. Problems lies in every sector but if we can solve through the
involvement of government and private sector in this field then this sector has lot of capacities
and it can be a means of rural development.

A study conducted by Bhatt and Bhatt (2013) on the Liquidity refers to the efficiency or ease
with which an asset or security can be converted into ready cash without affecting its market
price. The most liquid asset of all is cash itself. In other words, liquidity describes the degree
to which an asset can be quickly bought or sold in the market at a price reflecting its intrinsic
value. Cash is universally considered the most liquid asset because it can most quickly and
easily be converted into other assets. Tangible assets, such as real estate, fine art, and
collectibles, are all relatively illiquid. Other financial assets, ranging from equities to
partnership units, fall at various places on the liquidity spectrum.

1.6.3 Research Gap

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Co-operative strength and its performance plays an important role in the stability and growth
of the economy. The researcher paper is done in the context of Nepal mainly emphasized on
liquidity. There is time gap between their research and time. So, there may be difference in the
decision of our research, works and this study.

1.7. Methods of the Study

1.7.1 Research Design
Generally, there are two types of research; Quantitative research and Qualitative research. This
research is quantitative research. Quantitative Research Design is any data that is in numerical
form such as statistics, percentages etc. The researcher analyzes the data with the help of
statistics. The researcher is hoping the numbers will yield an unbiased result that can be
generalized to some larger population.

1.7.2 Population and Sample

Population refers to a complete set of elements that possess some common characteristics
defined by sampling criteria established by researcher whereas sample may be defined as
representative unit of the target population which is to be worked upon by the researchers
during their study. Among 33,000 plus cooperatives company in Nepal. I have chosen only
Bandhubikash saving and cooperative as sample.

1.7.3 Types of Data

This project work report is based on Secondary Data. A researcher uses the data developed by
others in the past for their own purpose is known as secondary data. A primary data source is
an original data source, that is, one in which the data are collected firsthand by the researcher
for a specific research purpose or project. Primary data can be collected in a number of ways.
Secondary data can be obtained from published and unpublished resources. Secondary sources
of data were collected from the report published by the cooperative and other related books,
article and authentic website.

1.7.4 Data Collection Procedure

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In order to carry out the successful, research report, the researcher followed the following data
collection procedures: The data were mainly collected from the two sources. In this research,
we use secondary data only. Secondary data were collected with the help of annual reports of
the bank, articles, brochure etc. For the preparation of this report, secondary data has been
used. Some of the secondary data obtained from the management which is used are annual
report of three years, newsletter.
Data collection procedure means collecting the required data for the preparation of report. For
this purpose, only secondary data were collected from the annual reports of TSCC.

1.7.5 Techniques of Analysis

Such data are analyzed and interpreted using statistical, econometric and mathematical
techniques which known as data analysis. First of all, raw data are to be arranged in a systemic
order and they could be analyzed using various statistical tolls so as to reach the conclusion.
Thus, data analysis is the process of gathering, arranging, classifying, modeling and analyzing
the data with the purpose of generating useful information.
The collected data has been analyzed by the use of statistical tools with the help of MS excel.
The tools are used in the data presentation and analysis of this project report as follows:
 Tabulation method
 Percentage method
 Graphical Presentation
 Trend Analysis

1.8 Limitations of the Study

The researcher maintained the following limitations during the research period.
• This research only focused on liquidity analysis.
• The researcher has analyzed the data of five years (Fiscal year 2076/77 to 2080/81B.S)
only.
• This research is based on secondary data only.
.
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CHAPTER II
RESULTS AND ANALYSIS

2.1 Data Presentation and analysis

Liquidity Ratios
Liquidity ratios attempt to measure a company's ability to pay off its short-term debt
obligations. This is done by comparing a company's most liquid assets to short-term liabilities.
The higher liquidity ratios mean the bank has larger margin of safety and ability to cover its
short-term obligations. Because saving accounts and transaction deposits can be withdrawn at
any time, there is high liquidity risk for both the banks and other depository institutions.

2.1.1 Current Ratio

A current ratio is the quantitative relationship between current assets and current liabilities.
Current assets are those assets which can be converted into cash within a year. They include
cash and marketable securities, accounts receivable, inventories and so on. On the other hand,
currents liabilities are the obligations that must be paid within a year.
Current ratio is calculated by using this formula:
CurrentAssets
Current Ratio =
CurrentLiabilities
Table No.1
Current Ratio of TSCC
Fiscal Year Total C. Assets Total C. Liabilities Current Ratio
2076/77 20,025,018 17,499,028 1.14
2077/78 26,803,606 21,743,683 1.23
2078/79 32,992,959 26,524,266 1.24
2079/80 39,942,156 32,244,889 1.24
2080/81 47,080,275 38,557,713 1.22
Source: Annual Report of TSCC (FY2076/77 to 2080/81)
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Current Ratio
1.26

1.24

1.22

1.2

1.18
Current Ratio

1.16

1.14

1.12

1.1

1.08
2076/77 2077/78 2078/79 2079/80 2080/81

Fig.1 Current Ratio

The current ratios of Tripureshwar Saving and Credit Co-operative Organization Limited in
fiscal year 2076/77 and 2077/78are 1.14:1and 1.23:1 respectively. Similarly, current ratio of
TSCC in fiscal year 2078/79,2079/80 and 2080/81 are 1.24:1, 1.24:1 and 1.22:1.

The current ratio measures the ability of the organization to meet obligations due within one
year. As a conventional rule, the ratio a 2:1 is employed as a standard a comparison. Current
ratio less than 2:1 is typically considerate low and indicates short term financial difficulties.
The current ratio of TSCC is less than standard 2:1. Therefore, TSCC should increase the
current assets or decrease the current liabilities to increase the current ratio.

2.1.2 Quick Ratio

The quick ratio is a measure of a company's ability to meet its short-term obligations using its
most liquid assets (near cash or quick assets). Quick assets include those current assets that
presumably can be quickly converted to cash at close to their book values. Quick ratio is
 12

viewed as a sign of a company's financial strength or weakness; it gives information about a

company’s short term liquidity. The ratio tells creditors how much of the company's short term
debt can be met by selling all the company's liquid assets at very short notice.
The quick ratio is calculated in this manner.

Quick Assets
Quick Ratio =
Current Liabilities

Table No. 2
Quick Ratio of TSCC
Fiscal Year Quick Assets Total C. Liabilities Quick Ratio
2076/77 1,526,310 17,499,028 0.09
2077/78 838,292 21,743,683 0.04
2078/79 4,480,674 26,524,266 0.17
2079/80 1,749,656 32,244,889 0.05
2080/81 3,330,075 38,557,713 0.09
Source: Annual Report of TSCC (FY 2076/77 to 2080/81)

Quick Ratio
0.18

0.16

0.14

0.12

0.1 Quick Ratio

0.08

0.06

0.04

0.02

0
2076/77 2077/78 2078/79 2079/80 2080/81

Figure No.2 Quick Ratio

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From above table and figure the quick ratios of Tripureshwar Saving and Credit Co-operative
Organization Limited in fiscal year 2076/77, 2077/78 are 0.09:1 and 0.04:1 respectively.
Similarly, quickRatio of TSCC in fiscal year 2078/79, 2079/80 and 2080/81 are 0.17:1, 0.05:1
and 0.09:1.
The standard quick ratio is 1:1. Quick ratio of TSCC is lower than 1:1. So, TSCC should
maximize the quick assets or minimize the current liabilities for increase the quick ratio.

2.1.3 Net Working Capital

The net working capital, or simply "working capital", is the difference between total current
assets and total current liabilities. A positive amount means that the company is able to pay its
current liabilities with its current assets. If it results in a negative amount, it means that current
assets are not sufficient to cover for current liabilities. The net working capital also shows how
much excess or deficiency there is.

Net working capital = Current assets - Current liabilities

The net working capital works as a "safety cushion" to creditors. Creditors want to know
whether the company as enough current assets before extending new credit. A company has a
better chance of acquiring credit if it maintains a good level of working capital.

Table No.3
Net working Capital of TSCC
Fiscal Year Current Current Net Working % Change in
Assets Liabilities Capital Working Capital
2076/77 20,0 17,4 2,5
25,018 99,028 25,990
2077/78 26,8 21,7 5,0 100.31%
03,606 43,683 59,923
2078/79 32,9 26,5 6,4 27.84%
92,959 24,266 68,693
2079/80 39,9 32,2 7,6 18.99%
42,156 44,889 97,267
2080/81 47,0 38,5 8,5 10.72%
80,275 57,713 22,562
Source: Annual Report of TSCC (FY 2076/77 to 2080/81)
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Net working capital of TSCC on FY 2076/77 was Rs. 2525990. Then, working capital was
increased by 110.31% in next FY 2077/78. In FY 2078/79, 2079/80 and 077/78, the change
rates of working capital were 27.84 %, 18.99% and 10.72%.

% Change in Working Capital

120.00%

100.00%

80.00%

% Change in Working Capital

60.00%

40.00%

20.00%

0.00%
2076/77 2077/78 2078/79 2079/80 2080/81

Fig. 3 Net Working Capital

Data shows that the increasing rate of working capital Tripureshwar Saving and Credit
Cooperative Limited is decreased. Any company needs to maintain the working capital in
good level.

2.1.4 Total Assets Turnover Ratio

The asset turnover ratio, also known as the total asset turnover ratio, measures the efficiency
with which a company uses its assets to produce sales. The asset turnover ratio formula is
equal to net sales divided by the total or average assets of a company. A company with a high
asset turnover ratio operates more efficiently as compared to competitors with a lower ratio.
 15

It is the relation between total assets and total revenue. Where total assets turnover ratio can be
calculated as follows,

TotalRevenue
Total assets turnover ratio =
TotalAssets
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Table No.4
Total Assets Turnover Ratio of TSCC
Fiscal Year Net Revenue Total Assets TATOR
2076/77 2,504,052 21,109,377 0.119
2077/78 3,343,184 27,812,948 0.120
2078/79 4,156,917 33,956,337 0.122
2079/80 5,081,993 40,860,204 0.124
2080/81 5,746,738 47,958,525 0.120
Source: Annual Report of TSCC (FY 2076/77 to 2080/81)

Total assets turnover ratio of TSCC on Fiscal year 2076/77 is 0.119 times. Then TATOR
increases to 0.120 and 0.122 times in F/Y 2077/78 and 2078/79. Similarly TATOR of TSCC
were 0.124 and 0.120 times. Data shows that the TATOR of TSCC is increasing and
decreasing every fiscal year.

TATOR
0.125
0.124
0.123
0.122
0.121 TATOR
0.12
0.119
0.118
0.117
0.116
2076/77 2077/78 2078/79 2079/80 2080/81

Figure No. 4: Total Assets Turnover Ratio of TSCC

2.1.5 Return on Assets
The term return on assets (ROA) refers to a financial ratio that indicates how profitable a
company is in relation to its total assets. Corporate management, analysts, and investors can
use ROA to determine how efficiently a company uses its assets to generate a profit. The
 17

metric is commonly expressed as a percentage by using a company's net income and its
average assets. A higher ROA means a company is more efficient and productive at
managing its balance sheet to generate profits while a lower ROA indicates there is room for
improvement.
It is the relation between net incomes to total assets. It can be calculated as follows,

NetIncome
ROA =
TotalAssets

Table No.5
ROA of TSCC
Fiscal Year Net Profit Total Assets Return on Assets
2076/77 65,031 21,109,377 0.31%
2077/78 78,926 27,812,948 0.28%
2078/79 81,599 33,956,337 0.24%
2079/80 100,019 40,860,204 0.24%
2080/81 109,676 47,958,525 0.23%
Source: Annual Report of TSCC (FY 2076/77 to 2080/81)

Total assets of TSCC o fiscal year 2076/77 is Rs.21109377 and return on assets is 0.31% or
Rs. 65031. Similarly on fiscal year 2077/78, 2078/79, 2079/80, 2080/81 were ROA 0.28%,
0.24%, 0.24% and 0.23% respectively.
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Return on Assets
0.35%

0.30%

0.25%

0.20%
Return on Assets

0.15%

0.10%

0.05%

0.00%
2076/77 2077/78 2078/79 2079/80 2080/81

Figure No.5: ROA of TSCC

Data shows that Return on assets is in decreasing trend. Company should need to maintain the
ROA in increasing trend.

2.1.6 Return on Equity

Return on equity (ROE) is a measure of financial performance calculated by dividing net
income by shareholders' equity. Because shareholders' equity is equal to a company’s assets
minus its debt, ROE is considered the return on net assets. ROE is considered a gauge of a
corporation's profitability and how efficient it is in generating profits.
ROE is expressed as a percentage and can be calculated for any company if net income and
equity are both positive numbers. Net income is calculated before dividends paid to common
shareholders and after dividends to preferred shareholders and interest to lenders.

It is the ratio between net incomes to total equity. It can be calculated as follows,

Netincome
ROE =
TotalEquity
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Table no.6
Return on equity of TSCC
Fiscal Year Net Profit Equity Return on Equity
2076/77 65,031 3,332,729 1.95%
2077/78 78,926 5,695,803 1.39%
2078/79 81,599 6,917,803 1.18%
2079/80 100,019 7,698,163 1.30%
2080/81 109,676 8,540,187 1.28%
Source: Annual Report of TSCC (FY 2076/77 to 2080/81)

Total equity of TSCC o fiscal year 2076/77 is Rs 3332729 and return on equity is 1.95% or
Rs. 65031. Similarly on fiscal year 2077/78, 2078/79, 2079/80, 2080/81 were ROE 1.39%,
1.18%, 1.30 and 1.28 % respectively. Data shows that Return on equity is fluctuated.
Company should maintain this result.

Return on Equity
2.50%

2.00%

1.50%

Return on Equity

1.00%

0.50%

0.00%
2076/77 2077/78 2078/79 2079/80 2080/81

Figure no.6: Return on equity of TSCC

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2.1.7 Earning per share

It is the profit after tax figure that is divided by the number of common share to calculate the
value of Earning per share. The EPS is calculated in this manner:

Net profit after tax

EPS =
Number of common share outstanding

Table No.7
Earning per share (EPS) of TSCC
Fiscal Year Net profit after No of Equity EPS
tax share

2076/77 13736695 486812 28.7176

2077/78 14589444 506991 28.7765
2078/79 13184837 509262 25.8900
2079/80 20173624 513516 39.2852
2080/81 20747695 529356 39.1942
Source: Annual Report of TSCC (FY 2076/77 to 2080/81)

EPS

45
40
35
30
25
20
15
10
5
0
2076/77 2077/78 2078/79 2079/80 2080/81

fiscal year

Figure No. 7: Earning per share (EPS) of TSCC

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Earnings per share (EPS) Represents the earning available to equity shareholder on a per share
basis. Table and figure 2.1.7 shows that the earning per share of Tripureshwar saving and
credit cooperative limited for the current year study period is Rs.39.142. This EPS is higher
than the average EPS in fiscal year 2076/77, 2077/78, 2078/79, the net profit has increased so
the earning per share has also increased and became positive.

2.4. Major Findings

After the summary, the study has drawn in the following findings:
 The current ratios of Tripureshwar Saving and Credit Co-operative Organization
Limited in fiscal year 2072/73 and 2076/77 are 1.14:1 and 1.23:1 respectively.
Similarly, current ratio of TSCC in fiscal year 2077/78, 2078/79 and 2079/80 are
1.24:1, 1.24:1 and 1.22:1.
 The quick ratios of Tripureshwar Saving and Credit Co-operative Organization
Limited in fiscal year 2072/73, 2076/77 are 0.09:1 and 0.04:1 respectively. Similarly,
quick Ratio of TSCC in fiscal year 2077/78, 2078/79 and 2079/80 are 0.17:1, 0.05:1
and 0.09:1.
 Net working capital of TSCC on FY 2072/73 was Rs. 2525990. Then, working capital
was increased by 110.31% in next FY 2076/77. In FY 2077/78, 2078/79 and 076/77,
the change rates of working capital were 27.84 %, 18.99% and 1072%.
 Total assets turnover ratio of TSCC on Fiscal year 2076/77 is 0.119 times. Then
TATOR increases to 0.120 and 0.122 times in F/Y 2077/78 and 2078/79. Similarly
TATOR of TSCC were 0.124 and 0.120 times. Data shows that the TATOR of TSCC
is increasing and decreasing every fiscal year.
 Data shows that Return on assets is in decreasing trend. Company should need to
maintain the ROA in increasing trend.
 Total equity of TSCC o fiscal year 2076/77 is Rs 3332729 and return on equity is
1.95% or Rs. 65031. Similarly on fiscal year 2077/78, 2078/79, 2079/80, 2080/81 were
ROE 1.39%, 1.18%, 1.30 and 1.28 % respectively. Data shows that Return on equity is
fluctuated. Company should maintain this result.
 Earning per share of Tripureshwar saving and cooperative Limited’s is still a loop hole
to be mend because inside the data showing highest numbers on fiscal period/year of
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2077/78, 2079/80 and 2080/81, the average value of EPS is 32.3727 which means that
the company has gain noticeable money per share of outstanding stock.

CHAPTER III
SUMMARY AND CONCLUSION

3.1. Summary
A cooperative is an autonomous association of people united voluntarily to meet their common
economic, social and cultural needs and aspirations through a jointly owned
and democratically controlled business. Co-operatives include non-profit community
organizations and businesses that are owned and managed by the people who use their services
(a consumer cooperative); by the people who work there (a worker cooperative); by the people
who live there (a housing cooperative); hybrids such as worker cooperatives that are also
consumer cooperatives or credit unions; multi-stakeholder cooperatives such as those that
bring together civil society and local actors to deliver community needs; and second and third
tier cooperatives whose members are other cooperatives.

The meaning of cooperation is that isolated and powerless individuals can, by combining with
one another, achieve advantages available to the rich and the powerful so that they may
advance not only materially but also morally. In other words a cooperative is a business
organization that is owned by those who use its services, the control of which rests equally
with all the members. It is voluntary and democratic and the moral element is as important as
the material one. Furthermore, it recognizes social, educational, and community values.

Financial accounting is the process of recording, summarizing and reporting the myriad of
transactions resulting from business operations over a period of time. These transactions are
summarized in the preparation of financial statements, including the balance sheet, income
statement and cash flow statement, that encapsulate the company's operating performance over
a specified period. It is easier to understand the concept of the cooperative by knowing its
specific objectives.
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Financial ratio analysis is a tool for investigating and comparing relationships between
different pieces of financial information. Overall financial performance of Tripureshwar
Saving and Credit Co-operative Limited is good.
The current ratios of Tripureshwar Saving and Credit Co-operative Organization Limited in
fiscal year 2072/73 and 2076/77 are 1.14:1 and 1.23:1 respectively. Similarly, current ratio of
TSCC in fiscal year 2077/78, 2078/79 and 2079/80 are 1.24:1, 1.24:1 and 1.22:1.The quick
ratios of Tripureshwar Saving and Credit Co-operative Organization Limited in fiscal year
2072/73, 2076/77 are 0.09:1 and 0.04:1 respectively. Similarly, quick Ratio of TSCC in fiscal
year 2077/78, 2078/79 and 2079/80 are 0.17:1, 0.05:1 and 0.09:1.

Net working capital of TSCC on FY 2072/73 was Rs. 2525990. Then, working capital was
increased by 110.31% in next FY 2076/77. In FY 2077/78, 2078/79 and 076/77, the change
rates of working capital were 27.84 %, 18.99% and 1072%. Total assets turnover ratio of
TSCC on Fiscal year 2076/77 is 0.119 times. Then TATOR increases to 0.120 and 0.122 times
in F/Y 2077/78 and 2078/79. Similarly TATOR of TSCC were 0.124 and 0.120 times. Data
shows that the TATOR of TSCC is increasing and decreasing every fiscal year.

Tripureshwar saving and credit cooperative limited, Net profit has been increased so the
earning per share has also increased and average by 32.3727 on fiscal year 2076/77 to
2080/81. Cooperative should focus on investment and returns to increase the net profit to
increase shareholders reward in a significant and consistent way.

3.2. Conclusion
Financial accounting is important for the Co-operative. One important tool that can help sort
out the data co-operative need is ''ratio analysis.'' Ratio analysis looks at the relationships
between key numbers on a company’s financial statements. After the ratios are calculated,
they can be compared to industry standards and the company’s past results, projections, and
goals — to highlight trends and identify strengths and weaknesses. The bottom line is that
ratio analysis can give valuable feedback which, in turn, may yield profitable results for
business.
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On the case of TSCC overall financial performance is good. Among many good factor of
TSCC, these are some recommendations towards the TSCC:
 The current ratio measures the ability of the organization to meet obligations due
within one year. As a conventional rule, the ratio a 2:1 is employed as a standard a
comparison. Current ratio less than 2:1 is typically considerate low and indicates short
term financial difficulties. The current ratio of TSCC is less than standard 2:1.
Therefore, TSCC should increase the current assets or decrease the current liabilities to
increase the current ratio.
 The standard quick ratio is 1:1. Quick ratio of TSCC is lower than 1:1. So, TSCC
should maximize the quick assets or minimize the current liabilities for increase the
quick ratio.
 Increasing rate of working capital Tripureshwar Saving and Credit Cooperative
Limited is decreased. Any company needs to maintain the working capital in good
level.
 Total equity of TSCC o fiscal year 2076/77 is Rs 3332729 and return on equity is
1.95% or Rs. 65031. Similarly on fiscal year 2077/78, 2078/79, 2079/80, 2080/81 were
ROE 1.39%, 1.18%, 1.30 and 1.28 % respectively. Data shows that Return on equity is
fluctuated. Company should maintain this result.
 ROA is in decreasing order, Company should increase return through effective work
efficiency.