CHAPTER – I

INTRODUCTION

INTRODUCTION:

In this chapter explained the studying of function areas on 0.1902

ALANGULAM PRIMARY AGRICULTURE CO – OPERATIVE CREDIT
SOCIETY AT ALANGULAM. We did our field work from this Co-Operative
Society during the period January to February 2018. Field work offer students a
period of practical experience in the industry relating to their field of study and this
experience is valuable to students as a means of allowing them to experience how
their studies are applied in the following in the real world and as work experience that
can be highly attractive to potential employer’s on a candidates. We have more
gainful information from 0.1902 Alangulam primary agriculture co – operative credit
society. Gaining relevant experience through internship and making professional
contacts while there two of the best things a student can do to prepare themselves for
getting a job their field after college.

OBJECTIVES:

 To develop skills in the application of there to practical work

situation.
 To know the various functions of the bank.
 To get an opportunity to understand organisational inter
relationship.
 To get an opportunities to test their interest in a particulars carrier
before permanent commitment.

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 CHAPTER – II

INDUSTRY PROFILE

Industry profile:

History of Cooperative Banking in India:

The historical roots of the Cooperative Movement in the world days back to
days of misery and distress in Europe faced by common people who had little or no
access to credit to fund their basic needs, in uncertain times. The idea spread when the
continent was faced with economic turmoil which led large populations to live at
subsistence level without any economic security. People were forced to poverty and
deprivation. It was the idea of Hermann Schulze (1808-83) and Friedrich Wilhelm
Raiffeisen (1818-88) which took shape as cooperative banks of today across the
world. They started to promote the idea of easy availability of credit to small
businesses and for the poor segment of society. It was similar to the many
microfinance institutions which have become highly popular in developing economies
of today. Although this helped spread cooperative movement in many parts of Europe,
in British Isles it is came from the revivalist Christian movement and found high
acceptance with working class and lower middle class segments of society. However,
UK and Irish credit unions in 20th century were inspired by US credit unions which in-
turn owe their emergence to Canadian adaptations of the German cooperative banking
concept. These movements were supported by governments of the respective
countries. This success was achieved due to the failure of the commercial banks to
fund and support the needs of small business owners and ordinary people who were
outside the formal banking net. Cooperative banks helped overcome the vital market
imperfections and serviced the poorer layers of society.

Indian Cooperative Banks was also born out of distress prevalent in Indian
society.

 The Cooperative Credit Societies Act, 1904 led to the formation of

Cooperative Credit Societies in both rural and urban areas. The act was based on
recommendations of Sir Frederick Nicholson (1899) and Sir Edward Law (1901).

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 Their ideas in turn were based on the pattern of Raiffeisen and Schulze
respectively.
 The Cooperative Societies Act of 1912, further gave recognition to the
formation of non-credit societies and the central cooperative organizations.
 In independent India, with the onset of planning, the cooperative organizations
gained more leverage and role with the continued governmental support.
 Machlagan Committee in 1915, highlighted the deficiencies of in cooperative
societies which seeped-in due to lack of proper education to the masses. He also
laid down the importance of Central Assistance by the Government to support the
movement.
 The Royal Commission on Agriculture 1928, enumerated the importance of
education of members/staff for effective implementation of cooperative movement.
 Saraiya Committee, in 1945, further recommended the setting up of a
Cooperative Training College in every state and a Cooperative Training Institute
for Advanced Study and Research at the Central level.
 Central Committee for Cooperative Training in 1953, constituted by RBI for
establishing Regional Training Centres.
 Rural Credit Survey Committee, 1954 was the first committee formed till then
to first delve into the problems of Rural credit and other financial issues of rural
society.

The cooperative movement and banking structures soon spread and resonated with
the unexpressed needs of the rural Indian and small scale businesses. Since, 1950s,
they have come a long way to support and provide assistance in activities like credit,
banking, production, processing, distribution/marketing, housing, warehousing,
irrigation, transport, textiles, dairy, sugar etc. to households.

Extent of Cooperative Banking:

Indian cooperative structures are one of the largest such networks in the world
with more than 200 million members. It has about 67% penetration in villages and
fund 46% of the total rural credit. It also stands for 36% of the total distribution of
rural fertilizers and 28% of rural fair price shops.

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 Structure of Cooperative Banking in India:
The structure of cooperative network in India can be divided into 2 broad segments-

1. Urban Cooperative Banks

2. Rural Cooperatives

1. Urban Cooperatives:
Urban Cooperatives can be further divided into scheduled and non-scheduled. Both
the categories are further divided into multi-state and single-state. Majority of these
banks fall in the non-scheduled and single-state category.

 Banking activities of Urban Cooperative Banks are monitored by RBI.

 Registration and Management activities are managed by Registrar of
Cooperative Societies (RCS). These RCS operate in single-state and Central RCS
(CRCS) operate in multiple state.

2. Rural Cooperatives:
The rural cooperatives are further divided into short-term and long-term structures.
The short-term cooperative banks are three tiered operating in different states. These
are-

1. State Cooperative Banks- They operate at the apex level in states

2. District Central Cooperative Banks-They operate at the district levels
3. Primary Agricultural Credit Societies-They operate at the village or grass-root
level.

Likewise, the long-term structures are further divided into –

1. State Cooperative Agriculture and Rural Development Banks (SCARDS)-

These operate at state-level.
2. Primary Cooperative Agriculture and Rural Development Banks (PCARDBS)-
They operate at district/block level.

The rural banking cooperatives have a complex monitoring structure as they have a
dual control which has led to many problems. A Forum called State Level Task Force

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 on Cooperative Urban Banks (TAFCUB) has been set-up to look into issues related to
duality in control.

 All banking activities are regulated by a shared arrangement between RBI and
NABARD.
 All management and registration activities are managed by RCS.

Co-Operative bank is an institution in the established on the Co-Operative

basis and dealing in ordinary banking business like other banks the Co-Operative
banks are founded by collecting funds through shares, accept deposits and grant loans.
Co-Operative movement in India was started primarily far dealing with the problem
of rural credit. The history of India Co-Operative banking started with the passing of
Co-Operative societies Act in 1904. The objective of this Act was to -establish Co-
Operative credit societies ‘ to encourage thrift, self-help and Co-Operative among
agriculturist artisans and persons of limited means’ many Co-Operative credit
societies were setup under this Act Co-Operative bank is an institution established on
the Co-Operative bank and dealing in ordinary banking business. Like other banks the
Co-Operative banks are founded by collecting funds through shares. Accept deposits
and grass loans. The Co-Operative banks however, differ form joint stock banks in the
following manner.

1 .Co-Operative banks issue share of unlimited liability, while the joint stock
banks issue shares of limited liability.

2. In a Co-Operative bank, one shareholder has one vote whatever the

number if share the may hold. In a joint stock bank, the voting right of a shareholder
is determined by the number of share he possesses.

3. Co-Operative bank are generally concerned with the rural credit and
provide financial assistance for agricultural and rural activities. Joint Stock Company
is primarily concerned with the credit requirements of trade and industry.

4. Co-Operative banking in India is federal in structure. Primary credit

societies are in the lowest rung. Then, there are central Co-Operative banks at the
district level and state Co-Operative banks at the state level. Joint stock bank do not
have such a federal structure.

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TYPES OF SOCIETIES:

1. Agricultural marketing societies:

As per section 2(1) agricultural marketing society means a society

a) The objective of which the marketing of agricultural produce and the supply of
implements and other requisites for agricultural production
b) Net less than three fourths of the members of which are agriculturists or
societies formed by agriculturists.

2. Consumer societies:

As per section 2(a) consumer a society means a society the object of

which is

(a) The procurement production(or) processing and distributions of

goods to, or the performance of others services for its members as
also other customers.
(b) The distribution among its members in the proportion prescribed
by rules (or) by the bye-laws of the society.

3. Co-operative bank:

As per section 2 (10) co-operative bank means a society which is doing

business of banking as defined in clause

(a) Of sub- section (1) of the banking companies act 1949and includes
any society which is functioning or is function as per (an
agriculture and rural development bank) under chapter XI

4. Central bank:

As per section 2(6) central bank means a co- operative bank the object of
which includes the creation of funds to be loaned to other societies but does not
includes the urban co-operative bank.

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5. Crop protection society:

As per section 2 (10-A) crop protection society means a society the object of
which is protection of the crops. Structures machinery agricultural implements and
other equipment such as those used for pumping water on the land.

6. General society:

As per section 2(15) general society means a society not falling in any of the
classes of societies defined by the order clauses of this section.

7. Housing society:

As per section 2 (16) housing society means society the objective of which is
to provide it members with open plots the dwelling houses or flats are already
acquired to provide it members common amenities and service

8. Irrigation society:

As per section 2 (16-A) life irrigation society means a societies the object of
which is to provide water supply by motive power or other wise to its members for
irrigations and otherwise.

9. Process society:

As per section 2(22) processing society mean a society the object of which is
the processing of goods.

10. Producers society:

As per section 2(2) producers society means a society the object of which is
production and disposal of goods (or) the collective of labour of the member there of

11. Resource society:

As per section 2(25) resource society means a society the object of which is
obtaining for its members of credit goods or services required by them

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12. Apex society:

As per section 2 (2) of M.C.S act apex society means a society

a) The area of operation of which extends to the whole of the state of

Maharashtra the main.

Duties and responsibilities and function of the society:

Secretary in functional officer of the society secretary is planner or

general execution and controlling activates of the society functions of secretary are as
follows:

1. To ensures to hold every month meeting

2. To pre hare agenda for MC meeting

3. To issue with agenda from MC meeting to member of MC

4. To read and confirm the meeting of last MC meeting

5. To prepare agenda for AGMI,GGM meeting

6. To issue notice with agenda for AGMISGM meeting to all member of the

society

7. To read and confirm the meeting of the last AGMISGM meeting

8. To record minutes of meeting MC, AGMISGM meeting

9. To issue share certificates with in stipulated time

10. To transfer share certificate to members to society

11. Deals with resignation transfer to member of society

12. Top make entry to nomination of the nominee register and sigh the

nomination form

13. To supervise to do inspection of talks of the society

14. To issue notice to members for internal leakage and other rehires

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15. To deal with outgoing of member by transferring flats after scrutinized the

paper as per bye – laws

16. To deal with application registration of membership

17. To pre hare and raise demand notice of society charges for member and

issue to all members on finance

18. The bring notice of default payment before MC meeting

19. To take action against default payment member by giving them legal notice

U/S for payment

20. To maintain following records for societies for better management

(a) Account records

(b) Members records

(c) Statutory records

21. To place complaints application with facts before the committee

22. The put record for auditing and get it furnished in the required manner

23. To bring breaches of bye laws by the members before the committee

24. To pre hare audit rectification report on audit remarks

25. To produce record before government authorities with consent of chairman

26. To give noc for flat sale agreement or noc for loan on flats

27. To record mortgage of flat on mortgage register loan register

28. To take action against members who breaches bye laws of society as per

decision of MC meeting

29. Maintains all order correspondence files document etc.

30. To issue letter of allotment of flats 0 Rs cancellation there

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 CHAPTER – III

COMPANY PROFILE

Company profile;

The 0.1902 Alangulam primary Agricultural Co-Operative credit society

limited was registered on 30.10.1958 and it was commenced on 30.12.1958 after that
it was defined by Tamilnadu Co- Operative society act 1983.

Place : alangulam

Talk : alangulam

District: tirunelveli

Pin code: 627853

Society registered date: 30/10/1958

Auditor’s name: A. Ravi

Co – operative auditing officer

Tenkasi

Head quartered: tenkasi

Number of members:

The total number of members was 6645 as on 2013

Area of operation

 Alangulam
 Kurippankulam
 Nallur
 Kuruvankottai

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Financial Resources:

Funds may be raised by the following manner;

1.share
2.subsciption
3.deposits
4.loans
5.donation
6.subsidies

TYPES OF LOAN

1. MT Loan 36 Month 13%

2. Consumer Loan 60 Month 13 ½ %
3. Kisan Cash credit 1 Year 7%
4. Jewel Loan 1 Year 13%
5. Jewel Loan – Agri 1 Year 7%
6. Deposit Loan
7. Government Security Loan
8. N.F.S. Loan 5 Year 13 ½ %
9. Housing Loan 15 Year 13 ½ %
10. Mortgause Loan 5 Year 13 ½ %
11. Pay Certificate Loan 5 Year 13 ½ %
12. Shopping complex loan 120 Month 13 ½ %
13. Sire loan 60 Month 13 ½ %
14. STPL loan 4 Month 13 ½ %
15. Tractor loan
16. Self help group loan
17. Agricultural loan
18. LG group loan
19. LG – MT loan
20. Kisan cash credit 1 Year 7%

MEMBER OF DEPOSITS AND LOAN:

DEPOSITS LOANS

YEAR NUMBERS AMOUNT NUMBERS AMOUNT

2006 – 2007 18536 133.28 7284 115.64

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2007 – 2008 19854 1205.37 7529 1314.44
2008 – 2009 21312 1579.31 7888 1609.59
2009 – 2010 22352 1667.35 8341 2057.82
2010 – 2011 22837 1751.19 8754 2472.75
2011 – 2012 23401 1890.12 9861 2867.30
2012 – 2013 17929 2060.30 8897 3193.14
2013 -2014 22766 2354.70 9219 3493.33

2014 – 2015 22933 2689.98 9357 3626.04

30/06/2015 23081 2860.10 9636 3740.69

PROFIT

Year Profit dividend

2006 – 2007 9.21 11%
2007 – 2008 11.27 14%
2008 – 2009 15.64 14%
2009 -2010 15.94 14%
2010 – 2011 16.74 14%
2011 – 2012 19.71 14%
2012 – 2013 22.35 14%

2013 -2014 26.47 tentative

2014 2015 51.74 tentative

Total : 4492 LOAN AVAILABLE LOAN

TOTAL NUMBER
PARTICULERS CROUP AMOUNT
SHG(w) 102 39 5240
GHG(M) 3 _ _
SHG(SC) 9 2 5.00

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 Joint liability group 11 4 31.33

Development of deposits and borrowings:

As on 30/06/2015 as 3,86, 927lakhs

Members loans: Rs.3740.39lakhs

Investment : Rs. 775.38 lakhs

Administration:

Staff

Staff Number of members

Secretary 1
Assestant secretary 1
Senior cleark 1
Cleark 2
Attender -
Salesman 1
Poon -
Total 6

Public distribution system:

No of shops : 2

Total cards : 2684

No. of sales man service: 2

State deposit locker falicity agri – clinic

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Medical:

500MT godown sanctioned by ICDP common service center.

SCOPE OF THE STUDY:

This study mainly focus on the rural credit of the bank and other related
matters such as

1. Financial position of the firm

2. Efficiency of the financial management of the firm.

3. Functions of the bank.

The mode of appointment:

1. The secretary appointing authority is board by granting promotion at Assistant

secretary.
2. The Assistant secretary appointed authority is board by granting promotion to
senior clerk.
3. The senior clerk appointed authority is board by granting promotion to Clerk /
Typist / Jewel appraises.
4. The Clerk / Typist / Jewel appraisal appointed by granting promotion to Junior
clerk / fertilizer sale man.
5. The fertilizer sale man appointed by granting promotion to sub staff / night
watchman.
6. The sub staff / night watchman appointing authority is Board.

Education Qualification for the posts:

1. The educational qualification for the secretary is,

 He must have co-operative training
 He must have possess knowledge in computer application.
 He must have previous experience
 A Degree in any discipline of any university Grants commission.
2. The education qualification for the Assistant secretary is,

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  He must have co-operative training
 He must possess knowledge in computer application.
 He must have previous experience
 A Degree in any discipline of any university recognized by the
university Grants commission
3. The educational qualification for the senior clerk / Accountant / Cashier is,
 He must have co-operative training
 He must possess knowledge in computer application.
 He must have precious experience
 A Degree in any discipline of any university recognized by university
Grand commission.

4. The educational qualification for the Clerk / Typist / Jewel Appraiser is,
 He must have co-operative Training
 He must possess knowledge in computer training
 He must have previous experience
 A degree in any discipline of any university recognized by university
Grand commission
5. The education qualification for the junior clerk / fertilizer sales man.
 He must have co-operative training
 He must possess knowledge in computer application.
 He must have previous experience
 A pass in higher secondary course or its equivalent with declaration of
eligibility for college course.
 The educational qualification for the sub staff / night watchman.
A pass in SSLC or its equivalent with declaration of eligibility for
higher secondary course.

Age at entry:

The maximum age limit for entry posts by direct recruitment shall be as
follows:

a) For candidate belonging to SC / ST – 35 years

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 b) For candidate belonging to BC, MBC and denotified communities – 32 years
c) For all other categories – 30 years

Probation:

A person appointed by the direct recruitment to any post in the society shall
from the date on which he joins duty, be on probation for a period of one year on duty
within a continuous period of two years.

Age of Retirement:

The age of retirement shall be 58 years for secretary, Assistant secretary

Manager / Accountant, senior clerk / cashier / clerk / jewel appraiser / junior
assistant / junior clerk / fertilizer salesman and Driver and be 60 year for peon and
watchman.

Resignation:

1. An employee may, on his own volition resign his job by tendering his
resignation in writing, indicating the reason therefore, to the society.
2. After seven days but within fifteen days from the date of tendering the
resignation letter, the employee shall give a sworn declaration to the effect
that he has tendered the resignation on his volition but not on any
compulsion from any authority, that he has not been driven to the extreme
decision of tendering the resignation out of emotional feeling and that in
the event of acceptance of resignation he shall not claim any service
benefit from the society and shall not seek reemployment in the society at
a later date on any ground.
3. It shall be competent to the appointing authority to accept or reject the
resignation tendered by the employee:
Provided that the appointing authority shall not accept the
resignation of the employee against whom any disciplinary /
surcharge / criminal proceeding or departmental enquiry is pending or
contemplated.
4. Where the resignation is accepted the appointing authority shall
communicate to the employee an order to that effect, indicating the date
from which the resignation will come into force.

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 5. Where the resignation is not accepted, the appointing authority shall
communicate an order to that effect to the employee concerned.
6. Where there is no communication of the order as to the acceptance or non-
acceptance of the resignation within a period of thirty days from the date
of receipt of the resignation letters in the office of the society, it shall be
deemed that the resignation tendered by the employee has not been
accepted by the appointing authority.

Theoretical Frame Work:

Financing:

Financing means the act of providing funds for business activities, making
purchases or investing. Financial institutions and banks are in the business of
financing as they provide capital to business, consumer and investors to help them
achieve their goals. There is a large variety of financing techniques that business and
consumers can use to receive financing these techniques range from IPO to bank loan.
The use of financing is vital in any economic system as it allows consumers to
purchase products out of their immediate reach, like houses, and businesses to finance
large investment projects.

Securement of funds from outside sources such as, by borrowing or by

attracting equity control. Use of leverage to improve the profitability of a business.
Achievement of an investment return on the borrowed funds at a higher rate than the
interest being paid for the use of the funds

The Following are examples of financing:

 Obtaining a mortgage loan on a purchase

 Assumptions of a mortgage from a seller
 Arranging for the seller to take a loan as part of the
purchase price
 Arranging an installment sale

RURAL OF CO OPERATIVE BANK:

The co-operative banks in the rural areas mainly finance the agricultural
based activities which include activities like farming, cattle, milk, hatchery, personal

Page 17 of 32
finance etc. this also includes some small industries and self employment driven
activities. These bank mainly finance various categories of peoples for self-
employment, industries, small seale units, home finance, consumer finance, and
personal finance.

Some of the forward looking co-operative banks have developed sufficient

core competencies to such an extent that they are able to challenge state and private
sector banks the exponential growth of co-operative banks is attributed mainly to their
much better contacts with the local people, personal interaction with customers, and
their ability to catch the nerve of the local client.

Provision for finance:

RBI helps the co-operative system to expand rural credit. The RBI provides
financial assistance for meeting short term, medium term and long term rural needs.
Various contribution of the Reserve Bank in promoting rural finance are discussed
below:

Agriculture Credit Department:

For expanding and coordination:

Credit facilities to the rural sector, reserve bank has set a separate Agricultural
department in April 1935. The main functions of the Department are:

1. To maintain an expert to study all question of agricultural credit and be

available for consultation by the central and state governments, state co-operative
banks and other banking organization

2. To co-ordinate the operations of the bank in connection with agricultural

credit and its relations with the state co-operative banks and other institutions engaged
in the business of agricultural credit.

Rural credit survey:

The Reserve bank appointed the rural survey committee in 1995 to

explore the possibilities of expanding the agricultural credit, particularly through co-
operative credit system. The committee submitted its report in December 1954 in
which main emphasis was laid on the crucial role of co-operation rural credit. The

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committee said that co-operation had failed but co-operation much succeed. For the
success of co-operative movement, the following basic principles.

 State partnership in co-operative credit institutions.

 Full co-ordination between credit and other agricultural
activities, particularly marketing and processing: and
 Administration through adequately trained and efficient
personnel, responsive to the needs to the rural population.

3. Setting up of funds:

The reserve bank set up the national agricultural credit long term operations
funds in February 1956. The purpose of the long-term operation funds was:

 To make long-term loans to state governments to enable them to subscribe the

share capital of co-operative credit institutions.
 To make medium term loans to state co-operative banks for agricultural
purpose.
 To make long-term to the central land mortgage banks against the guarantee of
the state government, and
 The 60 purpose debentures of central land mortgage banks against the
guarantee of the state government. The stabilization fund helps the state co-
operative banks to convert their short-term loans into medium-term loans in
cases of drought, famine or other calamities.

4. Other contributions:

The reserve bank also helps to promote rural credit by extending some other
facilities. It provides useful advice to the central and state Government on matters
relating to rural finance. It has developed a voluntary system of inspection of co-
operative banks: the reserve bank established the all India Training collaged at pune
in 1952. It also promotes research on the problems relating to the credit and co-
operative movement. The rural credit survey committee Report 1954 is a monumental
research work covering all aspects of rural credit

 Short-term finance the Reserve Bank provides short-term finance to the state
co-operative banks in two ways:

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 o Through loans and advances.
o Through rediscounting facility.
 Medium term finance the Reserve Bank provides medium-term loans to state
co-operative banks generally for 3 to 5 years. These loans are provided for
o Land improvements like bounding, digging of wells and water
channels:
o Repair of well and other irrigation schemes:
 Purchase of livestock, implements and machinery:
 Construction of farm houses and cattle sheds.

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Functions of Multi-Purpose Co-operative Society:

The multipurpose co-operative society has large number of functions to

discharge. As the name indicates its responsibility for different purpose for
which it has been set up. It can work for arranging credit, improved seeds,
agricultural implements, fertilizers, sanitation, health etc. for its members.
Normally it discharges the following functions.

1. Making Arrangement for Credit:

The main task of these co-operative societies is to arrange for short term
credit for its members in order to help them to improve their agriculture and
other trade and business.

2. Encouraging the Improved Method of Agriculture:

These societies arrange supply of to the members seeds, fertilizers,

agriculture implements etc. They also arrange for irrigation facilities so that the
members may be able to have higher agricultural yields.

3. Marketing and Business:

These societies not only help the farmers to improve their agriculture but
also help them for marketing of the goods. Through such facilities they get
proper price for the agricultural products and other goods produced by its
members.

Page 21 of 32
4. Set up of Subsidiary Cottage and Small Scale Industries:

These societies help their members to set up other trades and industries.
Though these cottage industries and small-scale industries, the economic
condition of the members is improved and they are able to improve their
standard of living.

5. Helping Members to Increase Their Standard of Living:

These co-operative societies by providing various types of facilities for

their members, improve their standard of living. They also carry out the
programme of health, education and social education. They make arrangements
for health and economic facilities, education and recreation for their members.

6. Encouraging the Member for Saving:

These societies act as saving agencies and encourage their members to

save a part of their income for their future needs. Through these savings, the
members of such co-operative societies are able to get loans and also solve their
problems.

7. Other Functions:

The multi-purpose Co-operative societies apart from these functions

discharge the following functions:

a) Purchase various things for their members at a reasonable price and supply
them.

b) In order to convert the un-economic holding into economic these societies take
a consolidation of holdings and co-operative farming.

c) Try to solve the disputes between members through arbitration and

adjudication.

Thus multi-operative society discharge large number of functions for

their members. The functions depend upon the interest and the object of the
members. If the members are anxious to do more things, the multi-purpose co-
operative societies can take to other function also.

Page 22 of 32
Page 23 of 32
 CHAPTER – IV

DATA ANALYSIS

&

INTERPRETATION

Data Analysis and Interpretation:

RATIO ANALYSIS:

It was done develop meaningful relationship between individual items

or group of items usually showed in the periodical financial statement published by
the concern. An accounting ratio shows the by the concern. An accounting ratio
shows the relationship between the two inter related accounting figures as gross profit
to sales, current assets to current liabilities loaned capital to owned capital etc.,

In other words ratio analysis was the one of the powerful tools of the financial
analysis. A ratio can be defined as “the indicated quotations’ of two mathematical
expression and as “ the relationship between two or more things’’.

IMPORTANCE OF RATIO ANALYSIS:

 Used in financial position analysis.

 Useful in simplifying accounting figures.
 Useful in assessing the operational efficiency.
 Useful in comparison of performance.
 Useful in forecasting purpose .
 Useful in locating the weak sports of the business.

FINANCIAL RATIO:

In this ratio calculated to judge the financial position of the concern

from long term as well as short term solvency point of view.

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Current ratio:

Current ratio is the most common ratio for measuring liquidity being related
between current asset and current liabilities

The current ratio is the ratio of total current asset to total liability

Current asset includes the cash in hand, cash at bank bills receivable, prepaid
expenses, debtors, loans in advances etc

Current liabilities includes for creditors, bills payable, bank overdraft,

outstanding expenses, interest due etc.

Current ratio= current assets/current liabilities

Table showing current ratio:

Year Current assets Current liabilities Ratio

2015 – 2016 363554261.8 19390547.76 1.87: 1

2016 – 2017 88358333 23136350 3.82: 1

Inference:

The above table shows the current ratio of Alangulam primary agricultural co
– operative bank for the last 2 years. In 2015 – 2016 it is 1:87:1 and in the year 2016 –
2017 it is 3.82:1. Over all current ratio is in increasing trend is shows companies
performance is good regarding working capital.

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Gross profit ratio:

This ratio explains per rupee profit generating capacity of sales. This
ratio is very useful to the proprietors and prospective investors because it reveals the
overall profitability of the concern. That is the ratio of gross profit to net sales and is
calculated as follows.

GROSS PROFIT
GROSS PROFIT RATIO = TURN
x 100 ¿
¿

Table showing Gross profit ratio

YEAR GROSS PROFIT NET TURNOVER RATIO

2015 – 2016 8541229.55 6841229.55 1.24%

2016 – 2017 27412.80 1497807 1.83%

INFERENCE:

The present table shows net profit ratio for computing gross profit ratio here
net turnover of the bank for last 2 year and gross profit of the last 2 years is taken into
consideration. The initial 2015 -2016 it is 1.24% and increase to 1.83% in 2016-2017.
It denotes bank gross profit ratio and profit earning capacity is also in good.

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Net profit ratio:

This ratio explains per rupee profit generating capacity of sales. This
ratio is very useful to the proprietors and prospective investors because it reveals the
overall profitability of the concern. That is the ratio of net profit after taxes to net
sales and is calculated as follows.

NET PROFIT
NETPROFIT RADIO = TURN
x 100 ¿
¿
Table showing net profit ratio

YEAR NET PROFIT NET TURNOVER RATIO

2015 – 2016 3093866.71 6841229.55 45.22%

2016 – 2017 2705023.25 1497807 180.60%

INFERENCE:

The present table shows net profit ratio for computing net profit ratio here
net turnover of the bank for last 2 year and net profit of the last 2 years is taken into
consideration. The initial 2015 – 2016 the net profit ratio is 45.22% and it is increase
to 180.60% in 2016 – 2017. It denotes bank net profit ratio and profit earning capacity
is very good.

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RETURN ON TOTAL ASSETS:

This ratio is calculated to measure the profit after tax against the amount invested
in total assets to as ratio whether assets are being utilized properly or not. It is
calculated as under.

NET PROFIT
RETURUN ON TOTAL ASSETS = x 100
TOTAL ASSETS

TABLE SHOWING RETURN ON TOTAL ASSETS

YEAR NET PROFIT TOTAL ASSETS RATIO

2015 – 2016 3093866.71 477750582.64 0.65%

2016 – 2017 2705023.25 563873835.13 0.48%

INFERENCE:

The present table inferences that return on total assets initial period that is
2015 – 2016 the ratio is 0.65% and it is decreased to 0.48% in 2016 to 2017. Return
on total assets ratio shows not stable position for the past 2 years comparing the total
assets the net profit earning capacity by bank is not good.

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TOTAL ASSETS TURN OVER RATIO:

This ratio is calculated by dividing the net sales by the value of total assets. A
high ratio is an indicator or over – trading of total assets while a low ratio reveals idle
capacity. The traditional standard for the ratio on is two times.

Turnover
TOTAL ASSETS TURN OVER RATIO =
Total Assets

TABLE SHOWING TOTAL ASSETS TURN OVER RATIO

YEAR TURN OVER NET FIXED ASSETS RATIO

2015 – 2016 6841229.55 477750582.64 0.014 times

2016 – 2017 1497807 563873835.13 0.0026 times

INFERENCE:

Present table denotes turn over on assets in 2015 – 2016 it is 0.014 times and
finally in 2016 – 2017 it is 0.0026 times on total assets. Over all turn over to total
assets ratio is averagely normal.

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DEPOSITS TO BORROWING RATIO:

The deposits to borrowing ratio can be calculated by dividing the total

Deposits include dement deposits savings deposits and term deposits.

Borrowings includes borrowings from RBI other banks other institution and
agencies.

It can be calculated by

DEOSITS OF THE YEAR

DEPOSITS TO BORROWING RATIO =
BORROWING OF THE YEAR

TABLE SHOWING DEPOSITS TO BORROWING RATIO

Year Deposits Borrowing Ratio

2015 – 2016 269100455.08 107143427 2.51:1

2016 – 2017 325421030.30 50340670 6.46:1

INFERENCE:

Deposits borrowing ratio also important ratio in a ratio analysis how does
the deposits made by customer and borrowing bought by banker is a natural of
deposits to borrowing ratio in the year 2015 – 2016, it is 2.51:1 comparing to
borrowings 2016 – 2017 it is 6.46:1. It is shows increasing trend.

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INVESTMENT TO DEPOSITS RATIO:

It indicates the ratio of which the proceeds of deposits are investment in

government security. Thus higher the ratio higher the liquidity position of the bank.
However very higher ratio may indicate the unnecessary looking up to capital on
government securities.

INVESTMENT
RATIO OF INVESTMENT TO DEPOSITS = x 100
DEPOSITS

TABLE SHOWING INVESTMENTS TO DEPOSITS

Year Investment Deposits Ratio

2015 – 2016 75310569.71 269100455.08 27.99%

2016 – 2017 37776494 325421030.30 11.61%

INFERENCE:

The above table show investment to deposits ratio it shows the relating
relation between investment and deposits initially in 2015 – 2016 it is 27.99 and it is
reduced to 11.61% in 2016 – 2017.

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 CHAPTER – V

CONCLUSION

CONCLUSION:

This is last part of field work. Now the researcher is liable to given a
conclusion. This Field work programme has given us more confidence and more
knowledge about this particular industry. And it is also given us knowledge about the
various deposits, various loans and office and administration areas. We have a good
idea about the risk involved in setting up and running an organisation and how to
overcome them and ways and methods to tackle problems.

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