CHAPTER - 3

FINANCIAL & MARKET ANALYSIS

RESEARCH APPROACH AND DESIGN

The nature of study of this project is descriptive and analytical. In analytical study, one has
to use facts or information already available and analyze these to make critical evaluation of
the material.

Secondary data are those data which have already been collected and stored. Secondary data
may be collected from:

• Annual reports of the bank

• Bulletins

• Periodicals

• News letters

• Internal reports of the bank

The study has been conducted with reference to the data related to Axis Bank. The study
examines the financial performance of some variables and compares the performance of
the bank over a period of five years.

4.2 SAMPLING DESIGN

For performance analysis of Axis Bank over the years, the study has been taken during the
period from 2016 to 2020(five years).To know the financial performance of the banks by
using ratio analysis and camel rating. Financial performance of the bank can be
analyzed through their financial reports

4.3 DATA ANALYSIS TOOLS

In this study, data was analyzed by using tabular representation of data to ease comparing
and to enable readers visually appreciate the findings from the study. Different scales will be
used for data analysis. Various financial ratios, bar charts are used to know financial
performance of the bank.
For the analysis of the financial performance the following tools are used:

a) Ratio Analysis

b) CAMEL Rating

c) Comparative balance sheet

a)RATIO ANALYSIS

Ratio analysis is one of the most powerful tools of financial analysis. It is a yardstick
which measures relationship between variables. In layman’s terms a ratio represents for
every amount one thing how much there is of another thing. Ratio analysis is a widely- used
tool of financial analysis. It can be used to compare the risk and return relationship of firms
of different sizes. It is defined as the systematic use of ratio interprets the financial statements
so that the strength and weakness

b) CAMEL Rating
CAMEL is a proportion based model to assess the execution of banks. It represents Capital
Adequacy, Asset Quality, Management Efficiency, Earning Quality and Liquidity. This model
identifies the strength and weakness of banks and helps in improving future development of
banking. The period for evaluating performance through CAMEL in this study is 5 years, i.e. from
financial year 2016 to 2020.

c) Comparative balance sheet

Comparative balance sheet is a balance sheet which provides financial figures of Assets, Liability
and equity for the “two or more period of the same company” or “two or more than two company of
same industry” or “two or more subsidiaries of same company” at the same page format so that this
can be easily understandable and easy to analysis. The comparative balance sheet has two-column
of amount against each balance sheet items; one column shows the current year financial position
whereas another column will show the previous year’s financial position so that investors or other
stakeholders can easily understand and analyze the company’s financial performance against last year.
TABLE 5.1 RETURN ON EQUITY

YEAR %
2020 -39.64
2021 -12.57
2022 -6.97
2023 12.14
2024 26.21

INTERPRETATION:

ROE is the most important indicator of a insurance com profitability and growth potential.
It is the rate of return to shareholders or the percentage return on each of equity invested in
the TGI LTD . Usually, there is higher ROE for high growth companies. TGI LTD has
higher ROE of 26.21% in the year 2024.

DIAGRAM 5.1 RETURN ON EQUITY

40

30

20

10

0
2020 2021 2022 2023 2024

-10

-20

-30

-40

-50

Series 1
TABLE 5.2 RETURN ON ASSETS

YEAR %
2020 -11.64
2021 -3.68
2022 -2.17
2023 4.41
2024 11.95

INTERPRETATION:

This ratio indicates how much net income is generated of assets. ROA can be increased by
insurance com either by increasing profit margins or asset turnover but they can’t do it
simultaneously because of competition and trade-off between turnover and margin. So bank
maintain higher ROA will make more the profit. TGI LTD has the highest ROA of 11.95%
in year 2024.

DIAGRAM 5.2 RETURN ON ASSETS

15

10

0
2020 2021 2022 2023 2024

-5

-10

-15

Series 1
TABLE 5.3 NET PROFIT MARGIN

YEAR %
2020 -16.59
2021 -7.93
2022 -2.94
2023 4.14
2024 10.78

INTERPRETATION:

It shows the profit margin and wealth of the organization, TGI LTD has highest NPM has
10.78% in the year 2021.

DIAGRAM 5.3 NET PROFT MARGIN

15

10

0
2020 2021 2022 2023 2024

-5

-10

-15

-20

Series 1
TABLE 5.4 CURRENT RATIO

YEAR %
2020 0.53
2021 0.60
2022 0.58
2023 0.45
2024 0.56

INTERPRETATION

It shows the liquidity position of the TGI LTD. A range between 1.5-3 is considered healthy. The TGI LTD
has a more ideal ratio of 0.60% in the year 2021.

DIAGRAM 5.4 CURRENT RATIO

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0
2020 2021 2022 2023 2024

Series 1
TABLE 5.5 QUICK RATIO

YEAR %
2020 0.38
2021 0.43
2022 0.44
2023 0.33
2024 0.43

INTERPRETATION

It shows the liquidity position of the TGI LTD . A range between 1.5-3 is considered healthy. The TGI
LTD has a more ideal ratio of 0.44% in the year 2022.

DIAGRAM 5.5 QUICK RATIO

0.5

0.45

0.4

0.35

0.3

0.25

0.2

0.15

0.1

0.05

0
2020 2021 2022 2023 2024

Series 1
TABLE 5.6 INVENTORY TURNOVER RATIO

YEAR %
2020 11.46
2021 4.54
2022 7.66
2023 12.52
2024 13.86

INTERPRETATION

It shows the liquidity position of the RGI LTD . The TGI LTD has a more ideal ratio of 13.86% in the
year 2024.

DIAGRAM 5.6 INVENTORY TURNOVER RATIO

16

14

12

10

0
2020 2021 2022 2023 2024

Series 1
COMPARATIVE BALANCE SHEET OF TGI LTD

TABLE 5.7 COMPARATIVE BALANCE SHEET FOR YEAR ENDING MARCH, 2021 AND
MARCH, 2022.

Year ending 31st March Increase/Decrease

Particulars
2021 2022 Amount Percentage%
LIABILITIES
SHARE 612.75 613.95 1.42 0.23
CAPITAL
RESERVES & 100,990.26 114,411.51 9,966.36 8.71
SURPLUSE
NET WORTH 101,603.01 115,174.06 10,242.6 8.89
DEPOSITS 707,306.08 821,720.91 125,224.3 15.23
BORROWINGS 142,873.16 185,133.86 1,166.18 0.62
Other 44,336.17 53,149.28 5,514.35 10.37
LIABILITIES &
PROVISIONS
TOTAL 996,118.42 1,175,178.1 142,147.4 12.09
LIABILITIES 1 2
ASSETS
FIXED ASSET 4,245.03 4,572.35 161.5 3.53
OTHER 80,303.76 76,325.48 -4,262.28 -5.58
ASSETS
ADVANCES 623,720.19 707,695.95 137,606.8 19.44
9
INVESTMENT 226,119.62 275,597.20 13,217.63 4.7
S
CASH 51,808.56 94,034.51 -27,916.75 -29.68
BANK 9,921.26 16,952.62 23,340.43 137.68
TOTAL ASSET 996,118.42 1,175,178.1 142,147.4 12.09
1
2
COMPARATIVE BALANCE SHEET OF TGI LTD

TABLE 5.20 COMPARATIVE BALANCE SHEET FOR YEAR ENDING MARCH, 2022 AND
MARCH, 2023.

Year ending 31st March Increase/Decrease

Particulars
2022 2023 Amount Percentage%
LIABILITIES
SHARE CAPITAL 613.95 615.37 1.42 0.23
RESERVES & SURPLUSE 114,411.51 124,377.87 9,966.36 8.71
NET WORTH 115,174.06 125,416.66 10,242.6 8.89
DEPOSITS 821,720.91 946,945.21 125,224.3 15.23
BORROWINGS 185,133.86 186,300.04 1,166.18 0.62
Other LIABILITIES & 53,149.28 58,663.63 5,514.35 10.37
PROVISIONS
TOTAL LIABILITIES 1,175,178.11 1,317,325.53 142,147.42 12.09
ASSETS
FIXED ASSET 4,572.35 4,733.85 161.5 3.53
OTHER ASSETS 76,325.48 72,063.20 -4,262.28 -5.58
ADVANCES 707,695.95 845,302.84 137,606.89 19.44
INVESTMENTS 275,597.20 288,814.83 13,217.63 4.7
CASH 94,034.51 66,117.76 -27,916.75 -29.68
BANK 16,952.62 40,293.05 23,340.43 137.68
TOTAL ASSET 1,175,178.11 1,317,325.53 142,147.42 12.09
COMPARATIVE BALANCE SHEET OF TGI LTD

TABLE 5.20 COMPARATIVE BALANCE SHEET FOR YEAR ENDING MARCH, 2023 AND
MARCH, 2024.

Particulars Year ending 31st March Increase/Decrease

2023 2024 Amount Percentage%
LIABILITIES
SHARE CAPITAL 615.37 617.31 1.94 0.31
RESERVES & 124,377.87 149,617.68 25,239 20.29
SURPLUSE
NET WORTH 125,416.66 151,061.58 25,644.92 20.44
DEPOSITS 946,945.21 1,068,641.39 121,696.18 12.85
BORROWINGS 186,300.04 196,811.75 10,511.71 5.64
Other LIABILITIES & 58,663.63 60,693.88 2,030.25 3.46
PROVISIONS
TOTAL LIABILITIES 1,317,325.53 1,477,208.60 159,883.07 12.13
ASSETS
FIXED ASSET 4,733.85 5,684.58 950.69 20.08
OTHER ASSETS 72,063.20 60,474.00 -11,589.2 -16.08
ADVANCES 845,302.84 965,068.38 119,765.54 14.16
INVESTMENTS 288,814.83 331,527.25 42,712.42 14.78
CASH 66,117.76 86,077.48 19,959.72 30.18
BANK 40,293.05 28,376.90 -11,916.15 -29.57
TOTAL ASSET 1,317,325.53 1,477,208.60 159,883.07 12.13
TABLE 5.11 PROFIT & LOSS ACCOUNT FOR THE YEAR 2022

PARTICULAR AMOUNT

INCOME :

REVENUE FROM OPERATIONS ( GROSS ) 46,880.97

Less: EXCISE\SEVISE TAX\OTHER LEVIES 0

REVENUE FROM OPERATIONS ( NET ) 46,880.97

TOTAL OPERATING REVENUES 47,263.68

OTHER INCOME 659.91

TOTAL REVENUE 47923.59

EXPENDITURE :

COST OF MATERIALS CONSUMED 31,693.11

PURCHASE OF STOCK IN TRADE 5,030

OPERATING & DIRECT EXPENSES 593.90

CHANGES IN STOCK IN TRADE -403.87

EMPLOYEE BENEFIT EXPENSES 3,601.51

FINANCE COSTS 2,121.73

DEPRECIATION & AMORTISATION EXP 1,760.57

OTHER EXPENSES 6,155.52

TOTAL EXPENDITURE 49,647.05

PROFIT BEFORE TAX -1,640.05

TOTAL TAX 99.18

PROFIT AFTER TAX -1,739.23

NET PROFIT -1,390.86

TABLE 5.11 PROFIT & LOSS ACCOUNT FOR THE YEAR 2023

PARTICULAR AMOUNT

INCOME :

REVENUE FROM OPERATIONS ( GROSS ) 65,298.84

Less: EXCISE\SEVISE TAX\OTHER LEVIES 0

REVENUE FROM OPERATIONS ( NET ) 65,298.84

TOTAL OPERATING REVENUES 65,757.33

OTHER INCOME 820.94

TOTAL REVENUE 65,578.27

EXPENDITURE :

COST OF MATERIALS CONSUMED 42,226.81

PURCHASE OF STOCK IN TRADE 6,561.32

OPERATING & DIRECT EXPENSES 899.06

CHANGES IN STOCK IN TRADE 484.69

EMPLOYEE BENEFIT EXPENSES 421.63

FINANCE COSTS 2,047.51

DEPRECIATION & AMORTISATION EXP 1,766.86

OTHER EXPENSES 8,099.50

TOTAL EXPENDITURE 65,040.65

PROFIT BEFORE TAX 1,254.80

TOTAL TAX -1,473.33

PROFIT AFTER TAX 2,728.13

NET PROFIT 2,728.13

TABLE 5.11 PROFIT & LOSS ACCOUNT FOR THE YEAR 2024

PARTICULAR AMOUNT
 INCOME :

REVENUE FROM OPERATIONS ( GROSS ) 72,745.92

Less: EXCISE\SEVISE TAX\OTHER LEVIES 0

REVENUE FROM OPERATIONS ( NET ) 72,745.92

TOTAL OPERATING REVENUES 73,303.08

OTHER INCOME 1,149.88

TOTAL REVENUE 74,452.96

EXPENDITURE :

COST OF MATERIALS CONSUMED 45,025.05

PURCHASE OF STOCK IN TRADE 7,764.19

OPERATING & DIRECT EXPENSES 1,104.79

CHANGES IN STOCK IN TRADE -644

EMPLOYEE BENEFIT EXPENSES 4,308.15

FINANCE COSTS 1,705.74

DEPRECIATION & AMORTISATION EXP 2,016.84

OTHER EXPENSES 9,215.96

TOTAL EXPENDITURE 69,410.55

PROFIT BEFORE TAX 7,850.82

TOTAL TAX -51.26

PROFIT AFTER TAX 7,902.08

NET PROFIT 7,902.08

TABLE 5.14 CASH FLOW STATEMENT OF AXIS BANK FOR THE YEAR 2020

PARTICULAR AMOUNT
 NET PROFIT BEFORE TAX -7,289.63

NET CASH INFLOW FROM OPERATING ACTIVITY -1,454.59

NET CASH USED IN INVESTING ACTIVITY -4,718.86

NET CASH USED FROM FINANCING ACTIVITY 7,749.21

FOREIGN EXCHANGE GAIN \ LOSS 82.14

Adjustments On Amalgamation Merger Demerger Others 0

NET CASH \ CASH EQUIVALENTS 1,657.90

CASH \ CASH EQUIVALENTS OPENING BALANCE 487.40

CASH \ CASH EQUIVALENTS CLOSING BALANCE 2,145.30

TABLE 5.14 CASH FLOW STATEMENT OF AXIS BANK FOR THE YEAR 2021

PARTICULAR AMOUNT

NET PROFIT BEFORE TAX -2,395.44

NET CASH INFLOW FROM OPERATING ACTIVITY 6,680.32

NET CASH USED IN INVESTING ACTIVITY -2,991.32

NET CASH USED FROM FINANCING ACTIVITY -3,471.91

FOREIGN EXCHANGE GAIN \ LOSS 3.15

Adjustments On Amalgamation Merger Demerger Others 0

NET CASH \ CASH EQUIVALENTS 220.24

CASH \ CASH EQUIVALENTS OPENING BALANCE 2,145.30

CASH \ CASH EQUIVALENTS CLOSING BALANCE 2,365.54

TABLE 5.14 CASH FLOW STATEMENT OF AXIS BANK FOR THE YEAR 2022

PARTICULAR AMOUNT

NET PROFIT BEFORE TAX -1,390.86

 NET CASH INFLOW FROM OPERATING ACTIVITY 5,281.93

NET CASH USED IN INVESTING ACTIVITY -3149.49

NET CASH USED FROM FINANCING ACTIVITY -515.84

FOREIGN EXCHANGE GAIN \ LOSS 9.30

Adjustments On Amalgamation Merger Demerger Others -1,541.21

NET CASH \ CASH EQUIVALENTS 84.69

CASH \ CASH EQUIVALENTS OPENING BALANCE 2365.54

CASH \ CASH EQUIVALENTS CLOSING BALANCE 2450.23

TABLE 5.14 CASH FLOW STATEMENT OF AXIS BANK FOR THE YEAR 2023

PARTICULAR AMOUNT

NET PROFIT BEFORE TAX 2,728.13

NET CASH INFLOW FROM OPERATING ACTIVITY 4775.43

NET CASH USED IN INVESTING ACTIVITY 922.67

NET CASH USED FROM FINANCING ACTIVITY -7,021.32

FOREIGN EXCHANGE GAIN \ LOSS -5.58

Adjustments On Amalgamation Merger Demerger Others 0

NET CASH \ CASH EQUIVALENTS -1,328.80

CASH \ CASH EQUIVALENTS OPENING BALANCE 2,450.23

CASH \ CASH EQUIVALENTS CLOSING BALANCE 1,121.43

TABLE 5.14 CASH FLOW STATEMENT OF AXIS BANK FOR THE YEAR 2024

PARTICULAR AMOUNT

NET PROFIT BEFORE TAX 7,902.08

NET CASH INFLOW FROM OPERATING ACTIVITY 8,661.71

NET CASH USED IN INVESTING ACTIVITY 1,481.19

NET CASH USED FROM FINANCING ACTIVITY -7,930.45

FOREIGN EXCHANGE GAIN \ LOSS 4.01

Adjustments On Amalgamation Merger Demerger Others 0

NET CASH \ CASH EQUIVALENTS 2,23.46

CASH \ CASH EQUIVALENTS OPENING BALANCE 1,121.43

CASH \ CASH EQUIVALENTS CLOSING BALANCE 3,344.89