RESEARCH PROJECT REPORT

ON

“A STUDY OF FINANCIAL PERFORMANCE

ANALYSIS WITH REFERENCE TO BAJAJ FINANCE
IN LUCKNOW”

Towards partial fulfilment of

Integrated Master of Business Administration (IMBA)
School of Management, Babu Banarasi Das University,
Lucknow

Presented By:
Avinash Singh
IMBA 4th Year
Roll No- 1200675018
 INTRODUCTION
RATIO ANALYSIS:
Ratio analysis is the method or process by which the relationship of items or group of items in the
financial statement are computed, determined and presented.
Ratio analysis is an attempt to derive quantitative measure or guides concerning the financial health
and profitability of business enterprises. Ratio analysis can be used both in trend and static analysis.
There are several ratios at the disposal of an analyst but their group of ratio he would prefer depends
on the purpose and the objective of analysis.
While a detailed explanation of ratio analysis is beyond the scope of this section, we will focus on a
technique, which is easy to use. It can provide you with a valuable investment analysis tool.
This technique is called cross-sectional analysis. Cross-sectional analysis compares financial ratios of
several companies from the same industry. Ratio analysis can provide valuable information about a
company's financial health. A financial ratio measures a company's performance in a specific area. For
example, you could use a ratio of a company's debt to its equity to measure a company's leverage. By
comparing the leverage ratios of two companies, you can determine which company uses greater debt
in the conduct of its business. A company whose leverage ratio is higher than a competitor's has more
debt per equity. You can use this information to make a judgment as to which company is a better
investment risk.
 COMPANY PROFILE

• BAJAJ GROUP:-
• Bajaj Group is an Indian conglomerate founded by Jamnalal Bajaj
in 1926, Mumbai. Bajaj Group is one of the oldest & largest
conglomerates based in Mumbai, Maharashtra. The group comprises
34 companies & its flagship company Bajaj Auto is ranked as the
world's fourth largest two- and three- wheeler manufacturer. some
of the notable companies are Bajaj Electricals, Mukand Ltd & Bajaj
Hindustan Ltd. Involvement in various industries that include
automobiles (2- and 3-wheelers), home appliances, lighting, iron
and steel, insurance, travel and finance. The Group is headed by
Rahul Bajaj.
 OBJECTIVE OF STUDY

• To study the periodic changes in the financial performance of

Bajaj finance
• To study the overall operating efficiency and performance of the
company.
• To ascertain the efficiency with which the firm is utilizing its
assets in generating sales revenue.
• To study the condition of liquidity and profitability in Bajaj
finance
 RESEARCH METHODOLOGY

Research Instruments
Study Used Secondary Data Collected From Publishers of the Bajaj finance. Final Accounts It Is Limited To Last Five Years 2019-
2023 Annual Financial Reports
Hypothesis Of The Study
The Bajaj finance. Profitability Is Improving With Constant Growth Rate
Statistical Tools
The Researcher has used the following tools to present and analysis Data.
Data Presentation
tables
Diagrams
Data analysis
Microsoft excel 2011
Period of the Study
This study of financial ratio analysis is limited to five years from 2019 to 2023 the accounting year starts from 1 April to 31
march.
Operational Key Terms Definition
Ratios: are the simplest mathematical (statistical) tools that reveal significant relationships hidden in mass of data, and
allow meaningful comparisons. Some ratios are expressed as fractions or decimals, and some as percentages. Major
types of business ratios include Efficiency, Liquidity, Profitability, and Solvency ratios.
Analysis: Ratio Analysis is a form of Financial Statement Analysis that is used to obtain a quick indication of a firm's financial
performance in several key areas. The ratios are categorized as Short-term Solvency Ratios, Debt Management Ratios, Asset
Management Ratios, Profitability Ratios, and Market Value Ratios Profit: The surplus remaining after total costs are deducted
from total revenue, and the basis on which tax is computed and dividend is paid. It is the best known measure of success in an
enterprise.
 DATA ANALYSIS AND INTERPRETATION

YEAR CURRENT ASSETS CURRENT LIABILITIES RATIO

2018-19 8439.39 14362.33 0.59

2019-20 10466.63 14466.89 0.73

2020-21 10021.39 13638.30 0.73

2021-22 13730.10 16732.40 0.82

2022-23 23957.90 17842.70 1.34

Interpretation: From the above table we can indicate that the current assets are very less
compared to current liability of the company. The company doesn’t have enough current assets in
meeting their liabilities. So, the company can’t meet immediate emergencies.
The company needs to increase current assets in order to meet its short-term obligation. We can
conclude that the ratio isn’t favorable as the current asset is less than the current liabilities.
 YEAR QUICK CURRENT RATI

ASSETS LIABILITIES O

2018-19 8382.53 14362.33 0.58

2019-20 10404.48 14466.89 0.72

2020-21 9994.15 13638.30 0.73

2021-22 13695.70 16732.40 0.82

2022-23 22866.90 17842.70 1.28

Interpretation: As per as quick ratio is concern whether a firm has enough short-term assets to
cover its immediate liabilities without selling inventory. Here, Open wings foundation review that
in 2019-20 increase their assets and then after very small percentage increase. That point of Time it
has not enough asset to cover its liabilities. Company ideal ratio is 1.5 so is below the ratio. This is
not good for company should be improving that point.
 YEAR CREDIT SALES AVG. DEBTORS RATI DAYs

2018-19 25761.11 2097.49 12.28 30

2019-20 34048.32 1515.76 22.46 16

2020-21 35609.54 2327.52 15.30 24

2021-22 38015.80 2240.39 16.97 23

2022-23 41,603.80 2134.50 18.45 18

Interpretation: Higher turnover signifies speedy and effective collection. Lower turnover
indicates sluggish and inefficient collection leading to the doubts that receivables might contain
significant doubtful debts. Receivables collection period is expressed in number of days. Here the
company in 1st year 1month to collection & after decline then after increase. Company does not
maintain lower collection period.
 YEAR PAT – NET WORTH RATIO

PREFERENCE

DIVIDEND

2018-19 6244.19 20241.49 30.85

2019-20 7743.84 27643.97 28.01

2020-21 9426.15 36737.18 25.66

2021-22 7716.90 44111.60 17.49

2022-23 5266.00 49429.60 10.65

Interpretation: As per as net worth ratio states

the return that shareholders could receive on
their investment in a company. Here the
company continuous declines year by year this
not well for company. But actually is right
because bank rate is low like 12 % is good for
investors.
 YEAR PAT NO. OF EQUITY RATIO

SHARES

2018-19 6244.19 189.79 32.90

2019-20 7743.84 189.82 40.79

2020-21 9426.15 379.75 24.82

2021-22 7716.90 379.75 20.32

2022-23 5266.00 379.75 13.87

Interpretation: As per as EPS ratio is concern the

portion of a company's profit allocated to each
outstanding share of common stock. Earnings per
share serve as an indicator of a company’s
profitability. Here the company shows high
profitability so it is good for company as well as
investor.
 YEAR PBIT CAPITAL EMPLOYED RATIO

2018-19 9450.20 56009.10 16.87

2019-20 11194.72 41776.10 26.80

2020-21 8747.65 35357.53 24.74

2021-22 7599.87 26811.63 28.35

2022-23 7514.80 11565.07 0.64

Interpretation: It is expressed as a percentage and can be very

revealing about the industry a company operates in, the skills of the
management and occasionally the general business climate. Here,
the company continuous increases efficiency. It is good for the
company.
 FІNDІNGS

• The liquidity position of the firm is very good. The current assets increased on the
whole from 2019-20 to 2022-23. This is because of continues increases in sundry
debtors and decreases in loans and advances. Though inventory and bank balance
fluctuated during these 5 years and the other current assets increasing by 2023. It also
implies a large part of the current assets is idle.
• The quick assets increased on the whole from 2019-20 to 2022-23. The company should
make sure that it should not increase its ratio more than 1 it’s not advisable the present
position companies ratio indicates normal liquidity position in the business.
• Shareholders fund is more than that of the long term debt. So, we can infer that the firm
assets are financed more by the internal funds rather than the external funds by which it
is using its resources more effective.
• The total debt ratio represents relationship of the owner’s funds to total assets, higher
the ratio the better the solvency position of the firm. The above ratio shows that the 5
years ratios more than 50%. So we consider that the long term solvency of the firm is
satisfaction.
 SUGGESTION AND RECOMMENDATION

Inventory is the most crucial asset for a manufacturing organisation. Particularly with reference to inventory
turnover ratio, the cost of materials in Indian Banking industry is the major component in production cost and
its share is increasing (Narayanan and Vashishth 2023). The managerial efficiency to keep an optimum level of
asset lies in maintaining an adequate ratio of assets to turnover.
Cost accounting and cost audit should be made mandatory in Banking industry and they should be called to
prepare cost sheet along with their annual financial statements.
A systematic, prompt and regular flow of information and its analysis is important for improving productivity,
efficiency and profitability. A suitable management information system needs to be evolved which will take
care of the data requirement of administrative officers as well as other units like factory etc., for internal
management and control. Appropriate organizational arrangements should be made for the successful
implementation of management information system in Indian Banking industry.
 CONCLUSION

On the basis of various techniques applied for the financial analysis of Bajaj finance. we can arrive
at a conclusion that the financial position and overall performance of the Bajaj finance. is satisfied.
The income level of the Bajaj finance. is quite better in 2022-23, the income from interest and other
income are around best position, and it is 5 and 4 respectively. Which show the better position in
income earning, and if we talk about the overall income position then it is around average. The
expenditure level was increased with increasing rate the overall rating of the expenses is into
between poor and average which show the poor condition of the Bajaj finance.. The level of
advances increased with increasing rate in 2022-23 it was in better position, if we talk about the
overall performance of the Bajaj finance. in case of level of advances then it is around average. The
amount of deposits was also increased with increasing rate, when we talk about the average
performance of Bajaj finance. for last five year then the position of current deposits, saving deposits
and demand deposits fall in the average category. Any comment including suggestion, I have given
which will be relevant and suitable separately in analysis report of above point. Therefore it is
advised by me to Bajaj finance. to give considerations and suggestion, which are the part of each
separate analysis report in above point.
 BIBLIOGRAPHY

• Website Addresses:
• http://ww.resarchgate.net
• https://www.glassdoor.co.in
• http://www.pnbmetlife.com
• http://wwwen.zte.com.cn