Shamanth Finalproject

“The Study on Financial Statement Analysis of SBI”
CHAPTER 1
INTRODUCTION
1.1 BANK
A bank is a business center that deals in financial services. A bank is a place where
your money is safe-locked and a secure place to dispose off your earnings. Banking
service in general includes receiving deposit money, lending money and processing
transactions. The history of origination of bank goes back a long way. Since then,
banks have influenced the economy of countries. India has a number of both
government undertaken banks as well as private ones.
Meaning of Banking:
A bank is an institution which deals in money and credit. Thus, bank is an intermediary
which handles other people’s money both for their advantage and to its own profit. But
bank is not merely a trader in money but also an important manufacturer of money. In
other words, a bank is a factory of credit.
Definition of Banking:
According to Section 5(1)(b), “Banking means accepting for the purpose of lending or
investing, of deposits of money from the public, repayable on demand or otherwise and
withdrawal by cheques, draft, and order or otherwise”.
Definition of Banking Company:
Section 5(1)(c), defines banking company as, “Any company which transacts the
business of banking in India”.
1.2 Features of Banking:

The following are the basic characteristics of Banking:
 Dealing in Money: The banks accept deposits from the public and advancing
them as loans to the needy people. The deposits may be different types –current,
Seshadripuram College, Tumkur Page No.1

fixed, savings, etc. accounts. The deposits are accepted on various terms and
conditions.
 Deposits must be withdrawal: The deposits made by the public can be
withdrawal by cheques, draft or otherwise, i.e., bank issue and pay cheques. The
deposits are usually withdrawal on demand.
 Dealing with credit: The bank are the institutions that can create credit i.e.,
creation of additional money for lending. Thus, “creation of credit” is the
unique feature of banking.
 Commercial in nature: Since all the banking functions are carried on with
the aim of making profit, it is regarded as a commercial institution.
 Nature of agent: Besides the basic functions of accepting deposits and
lending money as loans, bank possesses the character of an agent because of its
various agency services.
1.3 Banking in India

Banking in India originated in the first decade of 18th century with The General Bank
of India coming into existence in 1786. This was followed by Bank of Hindustan. Both
these banks are now defunct. The oldest bank in existence in India is the State Bank of
India being established as "The Bank of Bengal" in Calcutta in June 1806. A couple of
decades later, foreign banks like Credit Lyonnais started their Calcutta operations in
the 1850s. At that point of time, Calcutta was the most active trading port, mainly due
to the trade of the British Empire, and due to which banking activity took roots there
and prospered. The first fully Indian owned bank was the Allahabad Bank, which was
established in 1865.By the 1900s, the market expanded with the establishment of
banks such as Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, in
Mumbai - both of which were founded under private ownership. The Reserve Bank of
India formally took on the responsibility of regulating the Indian banking sector from

1935. After India's independence in 1947, the Reserve Bank was nationalized and
given broader powers.
The Indian Banking industry, which is governed by the Banking Regulation Act of
India, 1949 can be broadly classified into two major categories, non-scheduled banks
and scheduled banks. Scheduled banks comprise commercial banks and the co-
operative banks. In terms of ownership, commercial banks can be further grouped into
nationalized banks, the State Bank of India and its group banks, regional rural banks
and private sector banks (the old/ new domestic and foreign). These banks have over
67,000 branches spread across the country.
Diagram Shows the Banking Structure in India:
Scheduled Banks Non-Scheduled Banks
Scheduled Commercial Banks Scheduled Co-operative Banks
Public Regional Foreign Private Scheduled Urban Scheduled State

Sector Rural Banks in Sector Co-operative Co-operative
Banks Banks India Banks Banks Banks
Nationalized SBI & its Old Private New Private

Banks Subsidiaries Sector Banks Sector Banks
The Indian banking system has the RBI as the apex authority for all matters
relating to the banking system. It is the central bank on India.

Indian Banking Structure
The banking system in India can be broadly divided into three categories, viz. the
central bank of the country known as the Reserve Bank of India (RBI), the commercial
banks and the co –operative banks. The Reserve Bank of India is the supreme
monetary and banking authority in the country and has the responsibility to control the
banking system in the country. It keeps the reserves of all scheduled banks and hence
is known as the “Reserve Bank”. Below figure shows the structure of Indian banking.
Scheduled and Non –Scheduled Banks:

Under the Reserve Bank of India Act, 1934, banks were classified as scheduled banks
and non A–scheduled banks. The scheduled banks are those which are entered in the
Second Schedule of RBI Act, 1934. Such banks are those which have a paid –up
capital and reserves of an aggregate value of not less than Rs. 5 lakh and which satisfy
RBI that their affairs are carried out in the interests of their depositors. All commercial
banks –Indian and foreign, regional rural banks and State co –operative banks –are
scheduled banks. Non –Scheduled banks are those which have not been include in the
Second Schedule of RBI Act, 1934. At present, there are only three non –scheduled
banks in the country. Scheduled banks are divided into Commercial Banks and Co –
operative Banks. Commercial banks are based on profit, while co –operative banks are
based on co –operative principle.
Commercial banks have been in existence for many decades. They mobilize savings in
urban areas and make them available to large and small industrial and trading units
mainly for working capital requirements. After 1969 commercial banks are broadly
classified into nationalized or public sector banks and private sector banks. The State
Bank of India and its Associates banks along with another 20 banks are the public
sector banks. The private sector banks include a small number of Indian scheduled

banks which have not been nationalized and branches of foreign banks operating in
India –commonly known as foreign exchange banks.
The Regional Rural Banks (RRB’s) came into existence since the middle of 1970s with
the specific objective of providing credit and deposit facilities particularly to the small
a marginal farmers, agricultural laborers and artisans and small entrepreneurs. The
Regional Rural Banks have the responsibility to develop agriculture, trade, commerce
and industry in the rural areas. The RRB’s are essentially commercial banks but their
area of operation is limited to a district.
 Scheduled Banks
Scheduled banks are banks, which are included in the second schedule of the Banking
Regulation Act 1965. According to this schedule, a schedule bank
 Must have paid up capital & reserve of not less than Rs. 5,00,000
 Must also satisfy the RBI that its affairs are not conducted in a manner
determined to the interest of its depositors.
Scheduled banks can be subdivided as follows:

 Non-Scheduled Banks
These are banks, which are not included in the second schedule of the Banking
Regulation Act 1965. It means they do not satisfy the conditions laid down by
the schedule.
 They are further classified as follows: Central Co-operative banks &
primary credit societies.
 Commercial Bank

CHAPTER 2
INDUSTRY PROFILE
Definition & meaning:
Bank:
A modern bank performs numerous activities & it is difficult to incorporate all
the activities of a modem bank in a simple & satisfactory Definition. It is very difficult
to define the form “Bank” precisely. Even the best authorities of banking have failed
to provide critically examine some the important definition & understand the meaning
& main features of bank.
DEFINITION GIVEN BY INDIAN BANKING REGULATING ACT:

Indian Banking Regulation Act of 1949 was called before 31 March 1966,
Indian Banking Companies Act of 1949. Section 5(l) © of The Indian Banking
Regulation Act of 1949 defines the term “Banking Company” as “any company which
translates the business of banking in India”. Section 5(1) (b) of some act defines the
Term “Banking” as Accepting, for the purpose of landing or Investment of deposits of
money from the public, repayable on demand or otherwise & withdraw able by cheque,
drafts other to otherwise & withdraw able by cheque, drafts other to otherwise.
Sheldon’s Definition:
According to H.P. Sheldon says “the Sanction of receiving money? From his
customers & repaying it by honoring their cheques as & when required is the sanctions
above all other sanction which distinguishes a banking business from any other kind of

business”. According to this definition by receiving of current deposit. Repayment of

those deposits on demand by honoring cheques constitutes the chief sanction of a bank.
KINLAY’ S DEFINITION: -
Kinlay defines a bank as “an establishment which makes to individuals such

advance of money as may be required & safely made & to which individuals entrust
money when not needed by them for use”. This definition also makes mention of only.
The principle functions of a bank viz: acceptance of deposits & lending of funds but
not its subsidiary services.
FUNCTIONS OF BANK:
A part from the main business that is listed down under section 5(b) of the act.
Banking companies are allowed to carry on other forms of business that are stated in
section b of the act, They can be classified as follows main functions i.e. usual banking
activities & subsidiary function or services.
MAIN FUNCTIONS:
The borrowing, raising or taking up of money. The lending of money
with or without security.
The buying, selling & dealing in bullion. The buying & selling of
foreign exchange including foreign currencies.
The granting & issuing of Letters of credit of various kinds travelers
cheque etc.
The purchasing & sailing of bonds scrip’s etc on behalf of receiving
such securities for sale for safe custody.

The providing of safe deposits vaults. The collection & transmission

of money & Securities.
The acquiring, holding, issuing on commission, under writing &
dealing in stock, funds, share, debentures, bonds, securities &
investments of all kinds.
Above all they are allowed to deal in the fallow receipts, warrants, debentures,
certificates & other instruments.
SUBSIDIARY FUNCTIONS:
Acting as agents for individuals, Government etc. carrying of agencies business

of any descriptions. Contracting, negotiating, & issuing public & private Loans. Acting
as trustees for customers. Undertaking of the administration of estates as executor or
otherwise. Dealing with all or any part of the property & rights of the company.
Acquiring & undertaking the whole or any part of the business of any person or
company authorized under his sub-section. Effecting, insuring, guaranteeing, under
writing participating in managing & earring out of any issue, public or private.
Managing selling & realizing any property, which may come into its possessions in
satisfaction of any of its claims. Establishing or aiding in the establishment of
institutions. Funds, trust etc, of the benefit of the employees of the company granting
pensions & allowances & making payments, awards, Insurance & subscribing for
guaranteeing money or benevolent objects.
TYPES Of BANK :
Generally, banks ate classified on the basis of their functions they
are commercial banks or deposit bank.

Industrial bank or Investment banks.

1. Agricultural Banks.
2. Exchange Banks
3. Saving Banks
4. Central Banks
1. COMMERCIAL BANKS OR DEPOSIT BANKS :-

Commercial banks are banks which accept deposits from the public & lend then
mainly to commerce, they as called commercial banks. They are also called deposit
banks because they ace got deposits from the public & lend them form short & long
period.
2. INDUSTRIAL BANKS OR INVESTMENT BANKS: -

An industrial bank provides the Long-term finance (fixed capital) to industries &
they are called Investment bank because banks invest their functions in subscribing to
the share & debenture for Industrial concern.
3. AGRICULTURAL BANKS :-
Agricultural banks provide short-term finance to agriculturalists for the
purchase of fertilizers pesticides & seeds & for the payment of ways. It also provides
long term finance to former for purchase of agricultural machinery. Installation of
pump sets. Etc.

4. EXCHANGE BANKS :-
Exchange banks are banks which finance mainly for foreign exchange business
(i.e. the export & Import trade) of a country. As they finance mainly the foreign
exchange business of a county. They are called exchange banks.
5. SAVING BANKS :-
Saving Banks are special banks which specialization in the mobilization of the
small saving of the middle. & low income groups. They sound only in few countries
like USA, Canada etc. In most countries, saving bank business is done by commercial
banks.
6. CENTRAL BANK :-
A central bank is the highest Banking & monetary institution of a country. In
other words it is Leader of all other banking & monetary institutions found in a
country. As it occupies a central position in the banking structure of a country, it is
called central bank.
COMMERCIAL BANKS & THEIR FUNCTIONS:

“Ordinary banking business consists of changing cash from bank deposits & deposits
for cash, transferring bank deposits from one person to another & giving bank deposits
in exchange of bills of exchange government bonds. The secured promises of
businessmen to repay & so forth”.
The above quotation briefly sunup is the main function of commercial bank to
holds deposits & under Loans & investments with object of securing profits for its
share harder.

The functions of commercial banks can be classified into:
1. Primary functions.
2. Secondary functions.
A. PRIMARY FUNCTIONS:
1. ACCEPTING DEPOSITS:-Accepting of deposits is the most important function

of a modern commercial bank. It is the basis of all other activities of the bank. It
accepts four kinds of deposits.
a) Fixed Deposits.
b) Current Deposits.
c) Saving bank Deposits.
d) Recurring deposits.
A. Fixed Deposits: - These are the deposits, which are kept in the bank for a fixed
period. The people who keep deposits in the bank are also benefited. Not only their
money is kept in the safe custody of the bank but also they earn a certain income an
their deposits.
B. Current Deposits: - These are the deposits repayable an demand. A customer can
deposit or withdraw money any number of time daily. There are no restrictions on
withdraws from is account. Rank usually does not pay interest on the demand deposits
but a small rate of Interest is paid only on big amounts.
C. Saving Bank Deposits: - These are the deposits on which the bank pays some
interest & puts restriction on with draw, the customer is usually allowed to interest an
SB deposits is lower than that of fixed deposits. These accounts are usually opened by
the salary class people to save a part of their income.

D. Recurring Deposits: - Commercial banks allow recurring deposits being opened

by the customer. In this case a fixed amount is paid every month & at the end of one or
5 years a lamp sum is paid to the depositors. Such deposits encourage saving habit on
the part of people of people who have small income.
2. Giving Loan’s & Advances : The second important function of commercial

banks is to give loans & advances. This is the function by performing which it earns
its income. It grants loans & advances to businessmen only for a short period. It lends
to approve customers against personal security glad & skiver, stock of goods of any
asset.
Secondary Function:-
1. Agency Services:- A bank as an agent of its customer on be half of its customers

are subscription, life insurance premium, rent, bills, taxes, etc. The bank accepts the
standing instruction s from the customers & makers payments as & when directed.
They change a certain amount of the means of commission for these series. Banks
Through the instrument of bank drafts, arrange for transfer.
2. General utility services:- Safe custody valuable like gold, silver arrangements,
Jewelry securities title deeds etc, can be kept for safe custody with a bank on a
payment of small rent p.a, the sear of theft, fire etc. can thus be easily avoided. Issue of
letter of credit & traveler’s cheque. The Letter credit & traveler’s cheque very useful to
traders & tourists a person going abroad can obtain a letter of credit from us bank.
LOANS & ADVANCES:-

Leading of funds constitutes the main business of banks. The major portion of
banks funds is employed by way of advances. This is because; advances form the
major source of profits for a bank. Further, advance enables trade, commerce, industry
& agriculture to meet their financial requirements.
Banks make loan & advances to traders, business & industrialists against the
security of some assets or on the basis of personal security of the borrower. In either
case, the banks run the risk of default in repayment therefore, banks have to fallow a
cautions policy & sound lending principles in the matter of Lending
CHAPTER 3
BANK PROFILE

Banking in a profit seeking business firm dealing in money or rather decaling in

claims to money In This world every man is very busty in business to earn money. The
world is full of competition, in this heavy competition man has to struggle for his
existence & also get good respect in this society.
In our country modern banking of the western type trait comes in the i9 century
with the setting up of the first presidency bank. The bank of Bengal in Calcutta in 1980
initially the private sector took all interest in establishing the banking institution in
establishing the banking institution with a view to catering to the financial stock
company banks were the control bank of India. The bank of India. The Canara bank etc
came into existence in the trait decade of the 20th century. The Indian Joint stock
banks are governed by the banking Regulation act 1949.
One of the primary functions of a bank is to grant loans what ever money the
bank people receive by the way of deposits, it lends a major part of it to its customers
in the form of loans & advances.
History of SBI
The roots of State Bank of India lie in the first decade of the 19th century when the
Bank of Calcutta later renamed the Bank of Bengal, was established on 2 June 1806.
The Bank of Bengal was one of three Presidency banks, the other two being the Bank
of Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on
1 July 1843). All three Presidency banks were incorporated as joint stock companies
and were the result of royal charters. These three banks received the exclusive right to
issue paper currency till 1861 when, with the Paper Currency Act, the right was taken
over by the Government of India. The Presidency banks amalgamated on 27 January
1921, and the re-organized banking entity took as its name Imperial Bank of India. The

Imperial Bank of India remained a joint-stock company but without Government

participation.
Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of
India, which is India's central bank, acquired a controlling interest in the Imperial Bank
of India. On 1 July 1955, the Imperial Bank of India became the State Bank of India.
Business Profile of SBI
SBI is the 43rd largest bank in the world and ranked 221st in the Fortune Global 500
list of the world's biggest corporations of 2020, being the only Indian bank on the list.
It is a public sector bank and the largest bank in India with a 23% market share by
assets and a 25% share of the total loan and deposits market.
SBI Services in Rural Areas
Rural and semi urban branches -6473 SBI has 30 regional rural banks in India. The
rural banks is spread in 13 states extending from Kashmir to Karnataka and Himachal
to North east. The total number of SBI's RRB branches are 2349(16%).
Vision
We will create products and services that help our customers achieve their goals. We
will go beyond the call of duty to make our customers feel valued. We will be of
service even in the remotest part of our country. We will offer excellence in services to
those abroad as much as we do to those in India.
Mission
To provide unmatched products, incisive expertise and premium privileges with focus
on Client Experience and Quality in Service Delivery.

SBI Services
SBI offers a products and services such as

1.savings account.
2.credit cards.
3.Fixed deposits.
4.personal loan.
5.home loan.
6.business loan.
7.debit card.
8.loan against property.
9.car loan.
10.gold loan.
CHAPTER 4
RESEARCH METODOLOGY

Statement of the problems:

The study is conducted to know the overall functions performed by the State
Bank of India and to study how the bank is helpful to borrower’s customers.
HYPOTHESES/ASSUMPTIONS:
The following are the assumptions done during the study:

 A definition used in this study is assumed to be acceptable.
 Information provide by the officials accurate.
 Information collected from internet is true.
METHODOLOGY:
The primary data collected from sources like direct personal observation oral
interview or Mailed questionnaire method.
The secondary data collected from sources like journals. Magazines, annual report,
prospectus, periodicals etc.
 Exploratory Research
 Experimental Research
 Participate observations
 Personal interviews
 Analysis documents
Source of data collection:

Having determined the purpose & scope of statically enquiry a investor has to
determine the best method of collecting the duty, The sources of duty collection are
abused flied on the basic of the nature of data two groups.
1. Primary data.
2. Secondary data.
1. Primary data.
Data collected by the investigator for his own purpose for the first time from
beginning to end is called primary data. It is collected from the source of origin.
Primary data are those data which are originally collected for the First time, for a
specific purpose by an investor. They are collected directly from the people to whom
the enquiry is related. They are primary to the institution which contacts them for
information they are secondary to all other institution which report data.
It is the method where the first hand information is collected from an

organization selected for study.
The primary data or information has been collected through personal contacts
with managers of the bank asking some questions prepared in the form of
questionnaire. Data was also collected through informal interviews conducted with
bank’s executives and employees.
Secondary data:
Besides, primary data collected for the study, secondary data was
Collected from annual reports of bank, bank’s byelaws, and recordings of general body
meetings and journals.

Further more information relating to important definitions, and common meaning of

bank terms are collected from reputed books. Such as,
1. Bank journals
2. Internet
3. Text books
LIMITATIONS:
1. The information collected from the bank in short period mainly
concentrated on procedures.
2. Financial aspects of performance are not concerned because they are not
related.
3. Being a state bank of Mysore undertaking officials was not able to
disclose confidential matter. Therefore, such matters are not discussed in the
project study.
4. The study is limited to only main kinds of loans and advance and their
procedures.
CHAPTER 5
THEORITICAL BACKGROUND

The study “Financial Statement Analysis” was conducted in State Bank of

Mysore in order to know the financial status of the company.
The study is made to analyze the financial performance with reference to

financial statements like profit and loss account and balance sheet with the help of
tables, graphs, providing suggestions for improving the methods and procedure
followed in the firm.
The main aim is to study the activities of finance department by utilizing the
theoretical knowledge relating to practical situation and to highlight differences in
practice.
MEANING OF FINANCIAL ANALYSIS:
One of the important steps of accounting is the analysis and interpretation of the
financial statements which results in the presentation of data that helps various
categories of persons in forming opinion about the profitability and financial position
of the business concern.
In the words of Myres, “Financial Statement Analysis is largely a study of

relationship among the various financial factors in a business as disclosed by a single
set of statement and a study of the trend of the trend of these factors as shown in a
series of statements”.
The most important objective of the analysis and interpretation of financial
statements are to understand the significance and meaning of financial statement data
to known the strength and weakness of a business undertaking so that a forecast may
be made of the prospects of that undertaking.

FINANCIAL STATEMENTS:
A Financial Statement is an organized collection of data according to logical

and consistent accounting procedures. Its purpose is to convey an understanding of
some financial aspects of business firm. It way show a position at a moment of time as
in the case of balance sheet, or may reveal a series of activities over a given period of
time, as in the case of and Income Statement.
Therefore, the term financial statement generally refers to two basic statements,
such as Income Statement and Balance Sheet. Apart from these two statements, a
company may also prepare a statement of Retained Earnings and Statement of changes
in financial position
OBJECTIVES OR USES OF FINANCIAL ANALYSIS:
Financial analysis is helpful in assessing the financial position and profitability

of a concern. The following are the main objectives of analysis of financial statements:
1. To judge the present and future earning capacity or profitability of the concern.
2. To judge the operational efficiency as a whole and of its various parts or
departments.
3. To judge the short-term and long-term solvency of the concern for the benefit of
the debenture holders and trade creditors.
4. To have comparative study in regard to one department with another department.
5. To help in assessing developments in the future by making forecasts and preparing
budgets.

PROCESS OF FINANCIAL ANAYSIS:

The analysis of financial statements is a process of evaluating the
relationship between component of financial statements to obtain a better
understanding of the firm’s position and performance. The functional analysis is the
process of selections, relation and evaluation.
1.The first task of the financial analyst is to select the information relevant to the
decision under consideration from the total information contained in the financial
statements.
2.The second step is to arrange the information in a highlight significant
relationship.
3. The final step is interpretation and drawing of inferences and conclusions.
TYPES OF FINANCIAL ANALYSIS:
A Financial analysis can be external or internal.

External Analysis:
Those persons who are not connected with the enterprise make it. They do not
have access to the enterprise. They do not have access to the detailed record of the
company and have to depend mostly on published statements. Investors credit
agencies, governmental agencies and research Scholars make such type of analysis.
Internal Analysis:

Those persons who have access to the books of accounts make the internal
analysis. They are members of the organization. Analysis of financial statements or
other financial data for managerial purpose is the internal type of analysis. The internal
analyst can give more reliable result than the external analyst can because every type
of information is at his disposal.
TECHNIQUES OF FINANCIAL ANALYSIS:
The analysis and interpretation of financial statement is used to determine the

financial position and operations as well. A number of techniques are used to study the
relationship between different statements. The following methods of analysis are used.
 COMPARATIVE FINANCIAL STATEMENTS:

The comparative financial statements are statements of the financial position at
different periods of time. The elements of financial position are shown in a
comparative form so as to give an idea of financial position at two or more periods.
Thus, in these statements, figures for two or more periods are placed side by
side by side to facilities easy comparison. Both the income Statement and Balance
Sheet can be prepared in the form of comparative financial statements.
 COMPARATIVE INCOME STATEMENTS:
The income statement discloses net profit or net loss or account of operations. A
comparative income statement will show the absolute figures for two or more periods,
the absolute change from one period to another and if desired the change in terms of
percentages. Since the figures two or more periods are shown side by side, with the
help of this we can quickly ascertain whether sales have increased or decreased,

whether cost of sales have increased or decreased etc…therefore, only a glance of data
incorporated in this statement will be helpful in making useful conclusions.
 COMPARATIVE BALANCE SHEET:

Balance Sheet of two or more different dates can be used for comparing assets
and liabilities and finding out any increase or decrease in those items. Therefore, in a
single Balance Sheet the emphasis is on present position, it is on change in the
comparative balance sheet. This type of balance sheet is very helpful in studying the
trends in a business concern.
1. Common Size Financial Statements:
Common size financial statements are those in which figures reported are
converted into percentage to some common base. When this method is pursued, the
income statement exhibits each expense item or group of expense items as a
percentage of net sales, and net sales are taken at 100 percent. Similarly, each
individual asset and liability classification is shown as a percentage of total assets and
liabilities respectively. Statements prepared in this way are referred to as Common
Size statements.
Common-Size statements prepared for one firm over the years would highlight
the relative changes in each group of expenses, assets and liabilities. These statements
can be equally useful for inter-firm comparisons, given the fact that absolute figures of
two firms of the same industry are not comparable.
2. Trend percentages:

Trend percentages are very much helpful in making a comparative study of the
financial statements for several years. The way calculating trend percentages involves
the calculation of percentage relationship that each item bears to the same item in the
base year. Each item of base year is taken as 100 and on that basis the percentages for
each of the items of each of the years are calculated. These percentages can be taken
as index Number showing the relative changes in the financial data resulting with the
passage of time. This method is a very much useful, analytical device for the
management since by substitution of percentages for large amounts, brevity and
readability are achieved.
3. Funds flow statements:
Funds flow statement is a financial statement, which indicates the various

means by which the funds have been obtained during the certain period and the ways
to which these funds have used during that period.
In short, it is the statement, which shows the movement of funds between two
balance sheet dates.
According to Anthony, “The funds flow statements describes the sources from
which additional funds were derived and the uses to
Which these funds were put”.
The funds flow statement is called by different names, such as, Statement of
sources and Applications of Funds, Statement of changes in Working Capital, Where
Got and Statement and statement of Resources Provided and Applied.
4. Cash flow statement:

Cash flow statement shows the movement of cash and their causes during the
period under consideration. It may be prepared annually, half – yearly, monthly,
weekly or for any other duration.
Cash flow statement is prepared to show the impact of financial policies and
procedures on the cash position of the firm and takes into consideration all
transactions that have a direct impact upon cash.
A cash flow statement concentrates on transactions that have direct impact on
cash. It deals with the inflow and outflow of cash between two Balance Sheet dates.
In other words, a statement of changes in a financial position of a firm on cash basis
is called a Cash flow statement.
CHAPTER 6

DATA ANALYSIS & INTERPRETTION
BALANCE SHEET
Table Showing on the Company Balance Sheet of 2019-20 (RS in CRORES)
amt/base
Particulars 2019 2020 CYR - PYR year*100
EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS
Equity Share Capital ₹ ₹ ₹
892.46 892.46 - 0
TOTAL SHARE CAPITAL ₹ ₹ ₹

892.46 892.46 - 0
Revaluation Reserve ₹ ₹ ₹ -
24,653.94 23,762.67 891.27 -3.61%
Reserves and Surplus ₹ ₹ ₹
1,95,367.42 2,07,352.30 11,984.88 6.13%
Total Reserves and Surplus ₹ ₹ ₹

2,20,021.36 2,31,114.97 11,093.61 5.04%
TOTAL SHAREHOLDERS ₹ ₹ ₹
FUNDS 2,20,913.82 2,32,007.43 11,093.61 5.02%
Deposits ₹ ₹ ₹
29,11,386.01 32,41,620.73 3,30,234.72 11.34%
Borrowings ₹ ₹ ₹ -
4,03,017.12 3,14,655.65 88,361.47 -21.92%
Other Liabilities and ₹ ₹ ₹
Provisions 1,45,597.30 1,63,110.10 17,512.80 12.02%
TOTAL CAPITAL AND ₹ ₹ ₹ 7.34%

LIABILITIES 36,80,914.25 39,51,393.92 2,70,479.67
ASSETS
Cash and Balances with ₹ ₹ ₹ -
Reserve Bank of India 1,76,932.42 1,66,735.78 10,196.64 -5.76%
Balances with Banks Money at ₹ ₹ ₹
Call and Short Notice 45,557.69 84,361.23 38,803.54 85.17%
Investments ₹ ₹ ₹
9,67,021.95 10,46,954.52 79,932.57 8.26%
Advances ₹ ₹ ₹
21,85,876.92 23,25,289.56 1,39,412.64 6.37%
Fixed Assets ₹ ₹ ₹ -
39,197.57 38,439.28 758.29 -1.93%
Other Assets ₹ ₹ ₹
2,66,327.70 2,89,613.55 23,285.85 8.74%
TOTAL ASSETS ₹ ₹ ₹
36,80,914.25 39,51,393.92 2,70,479.67 7.34%
Interpretation of Company Balance Sheet of 2019-20

Liabilities
• There is no change in the Share Capital Pattern of the company Between 2019- 20
• There is increase in Shareholders Fund of 5.04% Compared to 2019
• There is Decrease in Borrowings of 21.92% Compared to 2020
• There is increase in Other Liabilities and Provisions of 12.02% Compared 2019
Assets
• There is Decrease in Cash and Balances with Reserve Bank of India of 5.76%
Compared to 2020
• There is Increase in Investments of 8.26% Compared to 2019
• There is Increase in Advances of 6.37% Compared to 2019

• There is decrease in Fixed Assets of 1.93% Compared to 2020
amt/base
Assets
₹ ₹ ₹
Fixed Assets 38,439.28 38,419.24 20.04 -5.20%
₹ ₹ ₹
Investments 10,46,954.52 13,51,705.21 3,04,750.69 29.10%
Current Assets
₹ ₹ ₹
Cash & Balances with RBI 1,66,735.78 2,13,201.54 46,465.76 27.86%
Balances with Bank Money at Call and ₹ ₹ ₹
short Notice 84,361.23 1,29,837.17 45,475.94 53.90%
₹ ₹ ₹
other assets 2,89,613.55 3,51,768.68 62,155.13 21.46%
₹ ₹ ₹
Advances 23,25,289.56 24,49,497.79 1,24,208.23 5.34%
₹ ₹ ₹
28,66,000.12 31,44,305.18 2,78,305.06 9.71%
₹
₹ ₹ 5,83,035.8
Total Assets 39,51,393.82 45,34,429.63 1 14.75%
Liabilities
Shareholders Fund
₹ ₹
Equity Share Capital 892.46 892.46 - -
₹ ₹ ₹ -
Revaluation Reserve 23,762.67 23,577.35 185.32 0.77%
Reserve & Surplus ₹ ₹ ₹ 100.60%

2,07,352.30 2,29,405.38 2,08,670.08

₹ ₹ ₹
Total Shareholders Fund 2,32,007.43 2,53,875.19 21,867.76 9.42%
Current Liabilities
₹ ₹ ₹
Deposits 32,41,620.73 36,81,277.08 4,39,656.35 13.56%
₹ ₹ ₹
Borrowings 3,14,655.65 4,17,297.70 1,02,642.05 36.62%
₹ ₹ ₹
other Liabilities & Provisions 1,63,110.10 1,81,979.66 18,869.56 11.56%
₹ ₹ ₹
Total Current Liabilities 37,19,386.48 42,80,554.44 5,61,167.96 15.08%
₹
₹ ₹ 5,83,035.7
Total Liabilities 39,51,393.91 45,34,429.63 2 14.75%

Assets
• There is Decrease in Cash and Balances with Reserve Bank of India of 5.20%
Compared to 2021
• There is Increase in Investments of 29.10% Compared to 2020
• There is Increase in Advances of 5.34% Compared to 2020
• There is decrease in Fixed Assets of 5.20% Compared to 2021
Liabilities
• There is no change in the Share Capital Pattern of the company Between
2020-21
• There is increase in Shareholders Fund of 9.42% Compared to 2020
• There is increase in Borrowings of 36.62% Compared to 2020

• There is increase in Other Liabilities and Provisions of 11.56% Compared to

2020

Particulars 2021 2022 CYR - amt/base
PYR year*100
Assets
Fixed Assets ₹ ₹ ₹ - -1.85%
38,419.24 37,708.16 711.10
Investments ₹ ₹ ₹ 9.59%
13,51,705.21 14,81,445.47 1,29,740.26
Current Assets
Cash & Balances with RBI ₹ ₹ ₹ 20.94%
2,13,201.54 2,57,859.21 44,657.67
Balances with Bank Money at Call and ₹ ₹ ₹ 3.21%
short Notice 1,29,837.17 1,36,693.11 6,855.94
other assets ₹ ₹ ₹ - 3.36%
3,51,768.68 3,39,924.86 11,843.82
Advances ₹ ₹ ₹ 3.36%
24,49,497.79 27,33,966.59 2,84,468.80
₹ ₹ ₹ 10.30%
31,44,305.18 34,68,443.77 3,24,138.59
Total Assets ₹ ₹ ₹ 9.99%

45,34,429.63 49,87,597.40 4,53,167.77
Liabilities
Shareholders Fund
Equity Share Capital ₹ ₹ - -
829.46 829.46
Revaluation Reserve ₹ ₹ ₹ - -0.84%
23,577.35 23,377.87 199.48
Reserve & Surplus ₹ ₹ ₹ 11.51%
2,29,405.38 2,55,817.73 26,412.35
Total Shareholders Fund ₹ ₹ ₹ 10.32%
2,53,812.19 2,80,025.06 26,212.87
Current Liabilities
Deposits ₹ ₹ ₹ 10.05%

36,81,277.08 40,51,534.12 3,70,256.92

Borrowings ₹ ₹ ₹ 2.09%
4,17,297.70 4,26,043.38 8,745.68
other Liabilities & Provisions ₹ ₹ ₹ 26.35%
1,81,979.66 2,29,931.84 47,952.18
Total Current Liabilities ₹ ₹ ₹ 9.97%
42,80,554.44 47,07,509.34 4,26,954.90
Total Liabilities ₹ ₹ ₹ 9.99%

45,34,366.63 49,87,597.40 4,53,167.77
Assets
 There is Increase in Cash and Balances with Reserve Bank of India of 20.94%
Compared to 2021
 There is Increase in Investments of 9.59% Compared to 2021
 There is Increase in Advances of 3.36% Compared to 2021
 There is decrease in Fixed Assets of 1.85% Compared to 2022
Liabilities
 There is no change in the Share Capital Pattern of the company Between 2021-
22
 There is increase in Shareholders Fund of 9.42% Compared to 2021
 There is increase in Borrowings of 36.62% Compared to 2021
 There is increase in Other Liabilities and Provisions of 11.56% Compared to
2021

INCOME STATEMENT
Table Showing of the Company Comparative INCOME Statement of 2019-20
amt/base
INCOME
Interest / Discount on ₹ ₹ ₹
Advances / Bills 1,61,640.23 1,79,748.84 18,108.61 11.20%
Income from Investments ₹ ₹ ₹ -
74,406.16 68,204.72 6,201.44 -8.33%
Interest on Balance with RBI ₹ ₹ ₹
and Other Inter-Bank funds 1,179.07 2,920.41 1,741.34 147.68
Others+ ₹ ₹ ₹
5,643.19 6,449.63 806.44 14.29%
TOTAL INTEREST EARNED ₹ ₹ ₹

2,42,868.65 2,57,323.59 14,454.94 5.95%
Other Income ₹ ₹ ₹
36,774.89 45,221.48 8,446.59 22.96%
TOTAL INCOME ₹ ₹ ₹
2,79,643.54 3,02,545.07 22,901.53 8.18%
EXPENDITURE
Interest Expended ₹ ₹ ₹
1,54,519.78 1,59,238.77 4,718.99 3.05%
Payments to and Provisions ₹ ₹ ₹
for Employees 41,054.71 45,714.97 4,660.26 11.35%
Depreciation ₹ ₹ ₹
3,212.31 3,303.81 91.50 2.84%
Operating Expenses ₹ ₹
(excludes Employee Cost & 25,420.72 26,154.91 ₹
Depreciation) 734.19 2.88%
TOTAL OPERATING ₹ ₹ ₹
EXPENSES 69,687.74 75,173.69 5,485.95 7.87%

Provision Towards Income ₹ ₹ ₹

Tax 491.13 2,803.14 2,312.01 470.75%
Provision Towards Deferred ₹ ₹ ₹
Tax 954.12 7,510.99 6,556.87 687.2164927
Other Provisions and ₹ ₹ ₹ - -
Contingencies 53,828.55 43,330.37 10498.18 19.50299609
TOTAL PROVISIONS AND ₹ ₹ ₹ - -

CONTINGENCIES 54,573.80 53,644.50 929.30 1.702831762
TOTAL EXPENDITURE ₹ ₹ ₹
2,78,781.31 2,88,056.96 9,275.65 3.327213722
NET PROFIT / LOSS FOR ₹ ₹ ₹
THE YEAR 862.23 14,488.11 13,625.88 1580.306879
NET PROFIT / LOSS AFTER ₹ ₹ ₹
EI & PRIOR YEAR ITEMS 862.23 14,488.11 13,625.88 1580.306879
Profit / Loss Brought Forward ₹ - ₹ - ₹ -

15,078.57 15,226.06 147.49 0.978143153
TOTAL PROFIT / LOSS ₹ - ₹ -

AVAILABLE FOR 14,216.34 737.94 ₹
APPROPRIATIONS 13,478.40 -94.8092125
Interpretation of Income Statement of 2019-20

INCOMES
 There is Increase in Interest on Balance with RBI and Other Inter-Bank funds of
147.68% Compared to 2019
 There is decrease in Income from Investments of 8.33% Compared to 2020
 There is Increase in Income of 8.18% Compared to 2019
Expenditure
 There is Increase in Interest Expended of 3.05% Compared to 2019
 There is increase in Depreciation of 2.84% Compared to 2019
 There is Increase in Operating Expenses of 2.88% Compared to 2019

Profit / Loss :The Company is in Loss of 94.80% (rs.13478.40) Compared to 2020

CYR - Amt/Base
Particulars 2020 2021 PYR year*100
INCOME
Interest / Discount on Advances / 1,79,748.84 1,71,429.14
Bills -8319.7 -4.62%
Income from Investments 68,204.72 79,808.09 11603.37 17.01%
Interest on Balance with RBI and 2,920.41 4,317.53
Other Inter-Bank funds 1397.12 47.83%
Others 6,449.63 9,595.87 3146.24 48.78%
TOTAL INTEREST EARNED 2,57,323.59 2,65,150.63 7827.04 3.04%
Other Income 45,221.48 43,496.37 -1725.11 -3.81%
TOTAL INCOME 3,02,545.07 3,08,647.01 6101.94 2.01%
EXPENDITURE
Interest Expended 1,59,238.77 1,54,440.63 -4798.14 -3.01%
Payments to and Provisions for 45,714.97 50,936.00
Employees 5221.03 11.42%
Depreciation 3,303.81 3,317.55 13.74 0.41%
Operating Expenses (excludes 26,154.91 28,398.67
Employee Cost & Depreciation) 2243.76 8.57%
TOTAL OPERATING EXPENSES 75,173.69 82,652.22 7478.53 9.94%
Provision Towards Income Tax 2,803.14 10,760.88 7957.74 283.95%

Provision Towards Deferred Tax 7,510.99 -3,630.23 3880.76 51.66%
Other Provisions and Contingencies 43,330.37 44,013.03 682.66 1.57%
TOTAL PROVISIONS AND 53,644.50 51,143.68

CONTINGENCIES -2500.82 -0.46%
TOTAL EXPENDITURE 2,88,056.96 2,88,236.54 179.58 0.06%
NET PROFIT / LOSS FOR THE 14,488.11 20,410.47
YEAR 5922.36 40.08%
NET PROFIT / LOSS AFTER EI & 14,488.11 20,410.47
PRIOR YEAR ITEMS 5922.36 40.08%

Profit / Loss Brought Forward -15,226.06 -10,498.30 -

25724.36 -168.94%
TOTAL PROFIT / LOSS -737.94 9,912.17
AVAILABLE FOR
APPROPRIATIONS 9174.23 1243.22%

INCOMES
 There is Increase in Interest on Balance with RBI and Other Inter-Bank

funds of 47.83% Compared to 2020
 There is increase in Income from Investments of 17.01% Compared to
2020
Expenditure

Profit / Loss
 The Company is in Profit of 1243.22 (rs.9174.23) Compared to 2020
Amt/Base
INCOME
Interest / Discount on Advances / ₹ ₹ ₹
Bills 1,71,429.14 1,71,823.73 394.59 0.20%
Income from Investments ₹ ₹ ₹
79,808.09 84,877.20 5,069.11 6.35%

Interest on Balance with RBI and ₹ ₹ ₹

Other Inter-Bank funds 4,317.53 4,377.91 60.38 1.39%
Others ₹ ₹ ₹
9,595.87 14,378.44 4,782.57 49.83%
TOTAL INTEREST EARNED ₹ ₹ ₹
2,65,150.63 2,75,457.29 10,306.66 3.88%
Other Income ₹ ₹ ₹ -
43,496.37 40,563.91 2,932.46 -6.74%
TOTAL INCOME ₹ ₹ ₹
3,08,647.01 3,16,021.20 7,374.19 2.38%
EXPENDITURE
Interest Expended ₹ ₹ ₹
1,54,440.63 1,54,749.70 309.07 0.20%
Payments to and Provisions for ₹ ₹ ₹
Employees 50,936.00 57,561.99 6,625.99 13.00%
Depreciation ₹ ₹ ₹ -
3,317.55 3,248.59 68.96 -2.07%
Operating Expenses (excludes ₹ ₹ ₹
Employee Cost & Depreciation) 28,398.67 32,586.94 4,188.27 14.78%
TOTAL OPERATING EXPENSES ₹ ₹ ₹
82,652.22 93,397.52 10,745.30 13.00%
Provision Towards Income Tax ₹ ₹ ₹

10,760.88 11,427.30 666.42 6.19%
Provision Towards Deferred Tax ₹ - ₹ ₹
3,630.23 318.57 3,948.80 108.75%
Other Provisions and ₹ ₹ ₹-
Contingencies 44,013.03 24,452.13 19,560.90 -44.44%
TOTAL PROVISIONS AND ₹ ₹ ₹-
CONTINGENCIES 51,143.68 36,198.00 14,945.68 -29.22%
TOTAL EXPENDITURE ₹ ₹ ₹ -
2,88,236.54 2,84,345.22 3,891.32 -1.35%
NET PROFIT / LOSS FOR THE ₹ ₹ ₹
YEAR 20,410.47 31,675.98 11,265.51 55.19%
NET PROFIT / LOSS AFTER EI & ₹ ₹ ₹
PRIOR YEAR ITEMS 20,410.47 31,675.98 11,265.51 55.19%
Profit / Loss Brought Forward ₹ - ₹ - ₹

10,498.30 3,600.84 6,897.46 65.70%


INCOMES

2021
Expenditure

 There is decrease in Depreciation of 2.07% Compared to 2022
Profit / Loss
 The Company is in Profit of 183.23% (rs.18162.97) Compared to 2021.

CHAPTER 7
FINDINGS & CONCLUSION
Findings
20
 There is Decrease in Borrowings of 21.92% Compared to 2020
 There is increase in Other Liabilities and Provisions of 12.02% Compared 2019
 There is Decrease in Cash and Balances with Reserve Bank of India of 5.76%
Compared to 2020
 There is Decrease in Cash and Balances with Reserve Bank of India of 5.20%
Compared to 2021
 There is no change in the Share Capital Pattern of the company Between

2020-21
2020
 There is Increase in Cash and Balances with Reserve Bank of India of 20.94%
Compared to 2021

22
2021
 There is decrease in Income from Investments of 8.33% Compared to
2020

 The Company is in Loss of 94.80% (rs.13478.40) Compared to 2020

2020

 The Company is in Profit of 1243.22 (rs.9174.23) Compared to 2020

CONCLUSION
Financial Analysis Determines SBI health and stability, providing an understanding of

how the SBI conducts its business. It is important to know that financial statement
analysis has its limitations as well. Looking at the financial statements of SBI the
growth and development of the bank is stable and continuously in the increasing trend.
Due to covid-19 pandemic factor the revenue and profits were below the average but
could able to manage host pandemic era. Hence I must conclude that the financial
statements of SBI are positive and growth intensive, there is a scope for growth and
prospectus of the bank in several areas. I hope my research and findings would help
the bank and as well as investors while taking investment decisions.

Bibliography
1. Information from the Internet:

web site address https://www.sbi.co.in/documents/16012/25344824/190822-
English_file.png
2. Article in Magazine:
Stimmel, Stimmel & Roeser “Basic Banking Law”
3. Article in Encyclopedia:
Timur Kuran “Banks and Banking
4. Book with One Author:

A History of central banking and the Enslavement of Mankind.

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“The Study on Financial Statement Analysis of SBI”

1.2 Features of Banking:

Seshadripuram College, Tumkur Page No.1

1.3 Banking in India

Seshadripuram College, Tumkur Page No.2

Diagram Shows the Banking Structure in India:

Scheduled Banks Non-Scheduled Banks

Scheduled Commercial Banks Scheduled Co-operative Banks

Public Regional Foreign Private Scheduled Urban Scheduled State

Nationalized SBI & its Old Private New Private

Seshadripuram College, Tumkur Page No.3

Indian Banking Structure

Scheduled and Non –Scheduled Banks:

Seshadripuram College, Tumkur Page No.4

Scheduled banks can be subdivided as follows:

Seshadripuram College, Tumkur Page No.5

Definition & meaning:

DEFINITION GIVEN BY INDIAN BANKING REGULATING ACT:

Seshadripuram College, Tumkur Page No.6

business”. According to this definition by receiving of current deposit. Repayment of

Kinlay defines a bank as “an establishment which makes to individuals such

Seshadripuram College, Tumkur Page No.7

The providing of safe deposits vaults. The collection & transmission

Acting as agents for individuals, Government etc. carrying of agencies business

Seshadripuram College, Tumkur Page No.8

Industrial bank or Investment banks.

1. COMMERCIAL BANKS OR DEPOSIT BANKS :-

2. INDUSTRIAL BANKS OR INVESTMENT BANKS: -

Seshadripuram College, Tumkur Page No.9

COMMERCIAL BANKS & THEIR FUNCTIONS:

Seshadripuram College, Tumkur Page No.10

The functions of commercial banks can be classified into:

1. ACCEPTING DEPOSITS:-Accepting of deposits is the most important function

Seshadripuram College, Tumkur Page No.11

D. Recurring Deposits: - Commercial banks allow recurring deposits being opened

2. Giving Loan’s & Advances : The second important function of commercial

1. Agency Services:- A bank as an agent of its customer on be half of its customers

LOANS & ADVANCES:-

Seshadripuram College, Tumkur Page No.12

Seshadripuram College, Tumkur Page No.13

Banking in a profit seeking business firm dealing in money or rather decaling in

Seshadripuram College, Tumkur Page No.14

Imperial Bank of India remained a joint-stock company but without Government

Business Profile of SBI

SBI Services in Rural Areas

Seshadripuram College, Tumkur Page No.15

SBI offers a products and services such as

8.loan against property.

Seshadripuram College, Tumkur Page No.16

Statement of the problems:

The following are the assumptions done during the study:

Source of data collection:

Seshadripuram College, Tumkur Page No.17

It is the method where the first hand information is collected from an

Seshadripuram College, Tumkur Page No.18

Further more information relating to important definitions, and common meaning of

Seshadripuram College, Tumkur Page No.19

The study “Financial Statement Analysis” was conducted in State Bank of

The study is made to analyze the financial performance with reference to