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Asslam O Alikum Everyone,
Here I have Attached a file of "Project Proposal for ratio Analysis of Banking Companies" Which Is accepted In 1st attempt. 


Hope this Will be helpful for all those who are planning to select project instead of intern-ship.

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Start In the Name of ALLAH Almighty the Most Gracious the Ever Merciful.

 

Ratio Analysis for Banking Companies

Bank Al-Falah

Bank Al-Habib

Muslim Commercial Bank

 

A proposal for project

To be submitted to the department of Management Sciences

Virtual University of Pakistan

To fulfill the requirement for the degree of

Masters in Business Administration (MBA)

Submitted by:

Amber Shaheen

Student ID: mc090406185

MBA Finance (3.5 years) 7th semester

Submission date: 23rd May, 2013

Table of content

Chapter No. 1:  INTRODUCTION

1.1: Introduction of the project ------------------------------------------------------ 04

1.2: introduction of selected banking companies-----------------------------------04

1.3: objective of this project ----------------------------------------------------------05

1.4: significance of this project-------------------------------------------------------05

Chapter No. 2:  PROJECT PROCEEDING        page no: 7

2.1: Ratio Analysis--------------------------------------------------------------------- 05

2.2: Trend Analysis----------------------------------------------------------------------05

2.3. Methodology ------------------------------------------------------------------------06

Chapter No. 3:  METHODOLOGY

3.1: data collection sources--------------------------------------------------------------07

3.3: data processing tools----------------------------------------------------------------07

Chapter No. 4: 

A: \Introduction of Students---------------------------------08

B: BIBLIOGRAPHY------------------------------------------09

 

Chapter No. 1:

1.1 INTRODUCTION OF THE PROJECT

Understanding the financial ratios is key point in the success of any business. Capital is backbone of any business and every businessman wants to use his capital in such a way that he has to spend little and get high productivity by using his capital. Businessman always wants to reduce their costs and earns high profit which need a total planning and structure so that he can get desired results. And financial ratios are toll to check all these. Financial ratios help the business to analyze the fluctuation in financial conditions and to check how the business is going over the time. These ratios help to understand the strength and weakness of business. There are hundreds financial ratios which are used by using business, whether they are service oriented or industry.

Banking companies in Pakistan are most profit making organizations of which are working since last many decades.

Many researchers have been completed research on financial statement analysis of banking companies but there is always a place of improvement in every field of life. Financial statement analysis is key of calculation of financial data. It provides opport7unity to predict about the growth of organization and to make improvement in all the sectors and to make future plans.

Financial statement analysis use past data for calculation so can easily identify all the problem which business have faced and can be occur in future. Ratios are most important tool of financial analysis that help to implement plans, to check profitability, liquidity, leverage, reordering, structure of business and interest coverage ratio.

This project will cover three most important banking organizations in Pakistan which are working on national level and will predict about their financial conditions in last three years. The banking companies which I have selected are Al-Falah Bank, Bank Al-Habib and Muslim Commercial Bank. This project will make analysis on their financial position, on structure of companies, about their objectives and goals and financing decisions. It will compare three years profitability of these companies.

The important point of this project is to compare the profitability, liquidity and performance and financial condition of all these three companies with each other and other all banking industries as these are leading banking companies of Pakistan. The research shall explain the financial analysis of financial ratios and analysis with comparison of all companies’ financial statements which incorporated horizontal & vertical rations and trend ratios etc and it also will include common size analysis, review of descriptive material and comparisons of results with other types of data.

1.2 INTRODUCTION OF SELECTED BANKS

BANK AL-FALAH:

The Bank Al-Falah is most growing banking company in online banking anf have introduced the new methods of banking in Pakistan. It has made progress in very short period of time and now is known in whole country.   Bank Al-Falah Limited was established under companies’ ordinance 1984 in June 1992 and started its operation from November 1997. It was owned and incorporated by Abu Dhabi group and its 6th largest bank of Pakistan. It has 471 branches in 163 cities of this country. It representative office is in Dubai and also working in many other countries. The Bank provides financial solutions to their customers, different corporations, well established institutions and many governments sectors through a broad spectrum of products and services. Its services include corporate and investment banking, consumer banking and credit, securities brokerage, commercial, SME, agri-finance, Islamic and asset financing.

HABIB BANK LIMITED:

 Its services well recognized in the whole country and most well known banking company in Pakistan. It has started to provide its services in Pakistan in 1947 and established their head office in Karachi. It was nationalized in 1974 and continues to dominating the banking sector market share in inward foreign remittances (55%) and loans to small industries, traders and farmers. International operations were expanded to include the USA, Singapore, Oman, Belgium, Seychelles and Maldives and the Netherlands. It has been providing the basic banking services in throughout the country and has many branches in all the major cities of Pakistan and even in villages.

MCB BANK LIMITED:

MCB Bank Limited, with more than 60 years of experience as one of the leading banks in Pakistan, was incorporated on July 9 in 1947. MCB was nationalized along with other private banks in 1974 as part of Government of Pakistan's economic reform movement and was later privatized to Nishat Group lead consortium in 1991. MCB is reputed as one of the soundest financial institution and as one of the leading banks in Pakistan with a deposit base of PKR. 545 bln (apprx.) and total assets of PKR 766 bln approximately. The bank is versed as one of the oldest and most responsible banks in Pakistan and has played vital role in representing the country on global platforms while being one of the few institutions that are recognized and traded in the international market.

1.3 FINANCIAL PERIOD UNDER DISCUSSION:

Financial period mean the time duration for which accounts and financial statement are closed. For the comparison of financial ratios of these three selected banks I will use last three years financial statements. For this project I will use financial statements year 2010 to 2012.

1.4 OBJECTIVES OF THIS PROJECT

The objective of this project is to provide insight into how banking companies work, what are the strengths, opportunities, competitors, and weakness of these companies, which banking company is more feasible than the other. By the help of the ratio its give clear concept about the financial feasibility of the all these 3 banking companies so that they can take a appropriate financing decision.

Objectives of this project will be:

  1. To  analyze  the  selected  companies  efficiency  in  managing  their  resource  for generating profit.
  2. To assess the composition of capital structure of the selected banks, for example how much of the companies’ assets are financed through external and internal debt.
  3. Are these selected banks able to pay the current liabilities from their cash equivalents?

3.        To find out that how effectively selected banks are maximizing their profits by controlling their interest expenses.

4.        to compare the selected banks interest income with their interest expense.

 

1.4: SIGNIFICANCE OF THIS PROJECT

This project will be use to analyze the financial performance of these three banking companies and will provide detail of their financial policies, decision, structure and working. It will use used three past financial data to make different calculation in this project and on the basis of that analysis it will predict the about the future growth of these companies. It will make me able to understand the use of ratio in analysis of data and will broaden my field of study.

Output of the financial analysis will be to compute, determine and to present the relationship between different financial statements in different years. The results of this project will derive the quantitative measure or guide concerning regarding financial position and profitability of banking enterprises. The insights gained through financial analysis of multi-year financial ratios will help to understand. Result of this project will help to compare the results of financial ratios year to years and in budgeting forecasting.

This research will assist the management to make necessary decisions about future budgeting because the ratio analysis will show the major difference in the financial positions and will compare the profitability of banking companies. Than they can change their policies according to the results.

After analyzing the results the creditors can know the financial strength of these banking companies and can trust to give the credit to these companies. Stockholder can find the new ways of investment in these banking companies when they will see the results of financial ratios.

Chapter No. 2:  PROJECT PROCEEDING

The project proceeding will include the following steps:

  1. will make a specimen for the project
  2. Collection of annual financial reports of these three banking companies.
  3. calculation of specified ratios
  4. comparison of annual financial reports of all banking companies
  5. results after calculation of ratios
  6. comparison of results derived from financial ratios
  7. graphical representation of financial results
  8. Financial decision about the profitability and financial positions.
  9. Recommendation about the future financial policies like budgeting, credit taking, interest ratios etc.
  10. Final submission of project.

2.1: Ratio Analysis:

All these ratios will be calculated in this project and will be used to make financial ratio analysis:

  1. Net Profit Margin
  2. Operating Cash Flow Ratio
  3. Gross Spread Ratio
  4. Non-Interest Income to Total Income Ratio
  5. Spread Ratio
  6. Advances / Deposits Ratio
  7. Returns On Equity ( ROE) Ratio
  8. Debt Ratio
  9. Debt / Equity Ratio
  10. Price/Earnings Ratio

2.2: Trend Analysis:

Trend analysis studies the financial history of organizations for comparison.  It  is  the comparative  analysis  of  a  company's  financial  ratios  over  time.  This helps to detect problems or observe good management. Ratios are plotted on graph to see whether the ratios are falling, rising, or remaining relatively constant.

Chapter No. 3:  METHODOLOGY

3.1: data collection sources:

The secondary data will be used for this purpose as all the information can be getting from the websites of these companies and also from their annual financial reports of these selected banks of last three years. All the data can be found on the websites of these banking companies.

3.3: data processing tools:

For data processing the tabulations, financial calculations, and charts the software package of MS Office 2003 in which word will be used to write the reports  and excel will be used to present, analyze and processing the data of financial statements for different calculation the scientific calculator will also help.

Section II

A: Introduction of Student:

Last Degree Obtained:

Bachelor of Commerce (B.COM)

From University Of Punjab

Organization Name Where I am Currently Employed:

Urgetech (Software House)

Designation:

Assistant Accounts Officer

Experience:

I have worked in different organization on different levels:

A:  Doing Job in current organization Urgetech As an Assistant Accounts Officer since November 2012 to till now.

B: 2 years experience Lecturer and Management Officer in PAMS College

C: 6 months experience as a Co-coordinator in Consultancy Office named as Legend School of Accountancy Lahore.

B: BIBLIOGRAPHY

The following website is used for help to collect the data:

http://www.hbl.com/about-us-history.php

http://www.bankalfalah.com/

http://www.mcb.com.pk/mcb/about_mcb.asp

http://vulms.vu.edu.pk

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

excellent ....

Thats perfect 

Oye hoye mera project proposal yahan? wooooooooooowwwwwwwwww.... koi thanks b bol do mujy :P

Thanks but tell me ratio analysis was easy for three banks or difficult??

Thanks to Ap ko bol dain gay. Pehly thori si humari bi help ker dain project main.

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