A

SYNOPSIS REPORT
ON
A STUDY ON FINANCIAL STATEMENT ANALYSIS
AT
ICICI BANK LIMITED
Submitted
By
VIKAS KUMAR RATHORE
H.T.NO: 1302-20-672-222
PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF DEGREE
OF

MASTER OF BUSINESS ADMINISTRATION

Department of Business Administration

AURORA’S PG COLLEGE
RAMANTHAPUR
(Affiliated to Osmania University)
2020-2022

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 Aurora’s PG College (MBA), Ramanthapur
Department of Management

SYNOPSIS

Title of the Project : A STUDY ON FINANCIAL

STATEMENT ANALYSIS

Student Name : VIKAS KUMAR RATHORE

Hall Ticket Number : 1302-20-672-222

Signature of the Student :

Signature of the Guide :

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 INDEX

. No. CONTENTS Page No

1 INTRODUCTION

2 NEED FOR THE STUDY

3 OBJECTIVES OF THE STUDY

4 SCOPE OF THE STUDY

5 RESEARCH METHODOLOGY

6 REVIEW OF LITERATURE

7 PROPOSED OUTCOMES

8 LIMITATIONS OF THE STUDY

9 CHAPTERISATION

BIBLIOGRAPHY

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1.1 INTRODUCTION

Financial statement analysis can be referred as a process of understanding the risk and

profitability of a company by analyzing reported financial info, especially annual and

quarterly reports. Putting another way, financial statement analysis is a study about

accounting ratios among various items included in the balance sheet. These ratios include

asset utilization ratios, profitability ratios, leverage ratios, liquidity ratios, and valuation

ratios. Moreover, financial statement analysis is a quantifying method for determining the

past, current, and prospective performance of a company.

ADVANTAGES OF FINANCIAL STATEMENT ANALYSIS

The different advantages of financial statement analysis are listed below:

 The most important benefit if financial statement analysis is that it provides an idea

to the investors about deciding on investing their funds in a particular company.

 Another advantage of financial statement analysis is that regulatory authorities like

IASB can ensure the company following the required accounting standards.

 Financial statement analysis is helpful to the government agencies in analyzing the

taxation owed to the firm.

 Above all, the company is able to analyze its own performance over a specific time

period.

Financial statements are prepared primarily for decision making. They play a dominant role

in setting the framework of managerial decisions. But the information provided in the

financial statements is not an end in itself as no meaningful conclusions can be drawn from

these statements alone. However, the information provided in the financial statements is of

immense use in making decisions through analysis and interpretation of financial statements.

Financial analysis ‘the process of identifying the financial strengths and weaknesses of the

firm by properly establishing relationship between the items of the balance sheet and the

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profit and loss account’. There are various methods or techniques used in analyzing

financial statements financial are an important source of information for evaluating the

performance and prospects of firm, if properly analyzed and interpreted these statements can

provide valuable insights into firm’s performance. Analysis of financial statements is if

interest to lenders, investors, security analyst, manager and others.

Financial statements analysis may be done for a variety of purposes, which may range

from simple analysis of short term liquidity position of the form to a comprehensive

assessment of the strengths and weakness of the firm in various areas, it is helpful in

assessing corporate excellence , judging credit worthiness forecasting bond rating,

evaluating intrinsic value of equity shares predicting bankruptcy and assessing market risk.

FINANCIAL STATEMENTS

Managers, shareholders, creditors and other interested groups seek answer to the

following question about firm:

 What is the financial position of the firm at a given point of time?

 How has the firm performed financially over a given period of time?

 What have been the sources and uses of cash over a given period?

To answer these questions, accountant prepares two principle statements, the Balance

sheet and the profit and loss account, ancillary statement, the Cash Flow statement.

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ANALYSIS OF FINANCIAL STATEMENT

Analysis refers to the process of critical examination of the financial information

contained in the financial statement in order to understand and make decisions regarding

the operations of the firm. The analysis is basically study of the relationship among

various financial facts and figure as given in a set of financial statements.

Complex figures as given in this statements are dissected\broken up into simple

and variable elements and significant relationship are established between the elements

of the same statements are different financial statements.

This process of dissection, establishing and identifying the financial weaknesses

and strengths of the firm. It is indicative of two aspects of a firm i.e. The profitability and

the financial position and it are what are known as the objectives of the analysis.

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1.2 NEED FOR STUDY

 Need of financial statement analysis study to diagnose the information contain in

financial statement. So as to judge the profitability and financial position of the firm ICICI

BANK LIMITED

 Financial analyst analyses the financial statements with various tools of analysis

before commanding upon the financial health of the firm.

 Essential to bring out the history of ICICI BANK LIMITED

 Significance and meaning of the financial statements.

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1.3 OBJECTIVES OF THE STUDY

The main objective of the project is to analyze the financial statements of the company using

the financial statements viz, comparative and ratio analysis for this purpose of analysis. It

has been utilized the secondary data of the company ICICI BANK LIMITED i.e., annual

reports from 2016-2017 to 2020-2021 this will help in evaluating the company’s liquidity

conditions profitability long term solving and operational efficiency.

THE FOLLOWING ARE MAIN OBJECTIVES OF THE STUDY.

 To determine the financial statements and weakness of the firm.

 To determine the short –term solving of the firm

 To diagnose the information contained to financial statements so as to judge the

profitability and fondness of the firm.

 To establish relationship between various figures or the income statement and

balance sheet.

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1.4 SCOPE OF THE STUDY

Analysis of financial statement can be undertaken by different persons and for different

purposes, therefore, the scope of the AFS may be varying from one situation to

another.

However, the following are some the techniques of the AFS:

a) Comparative financial statements.

b) Common-size financial statements.

c) Trend percentage analysis.

d) Statement of changes in financial position.

e) Cost-volume-profit relations, and

f) Ratio analysis and others.

The last technique i.e. The ratio analysis is the most common, comprehensive and

powerful tool of the AFS. The importance of ratio analysis lies in the fact that

it presents facts on a comparative basis. As such, this study focuses only on this (ratio)

analysis.

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 1.5 RESEARCH METHODOLOGY

RESEARCH DESIGN

This is a systematic way to solve the research problem and it is important component for the

study without which researches may not be able to obtain the format. A research design is

the arrangement of conditions for collection and analysis of data in a manager that aims to

combine for collection and analysis of data relevance to the research purpose with economy

in procedure.

MEANING OF RESEARCH DESIGN

The formidable problem that follows the task of defining the research problem is the

preparation of design of the research project, popularly known as the research design,

decision regarding what, where, when, how much, by what means concerning an inquiry of

a research study constitute a research design. A research design is the arrangement of

conditions for collection and analysis of data in a manager that aims to combine for

collection and analysis of data relevance to the research purpose with economy in procedure.

SOURCES OF DATA

Data we collected based on two sources.

 Secondary data.

SECONDARY DATA:

The Secondary data are those which have already been collected by some other

agency and which have already been processed. The sources of Secondary data are Annual

Reports, browsing Internet, through magazines.

 It includes data gathered from the annual reports of ICICI BANK LIMITED

 Articles are collected from official website of ICICI BANK LIMITED

REVIEW OF LITERATURE
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FINANCIAL STATEMENT ANALYSIS

INTRODUCTION:-

The term ‘financial analysis also known as analysis and interpretation of financial

statements’ , refers to the process of determining financial strength and weaknesses of the

firm by establishing strategic relationship between the items of the balance sheet , profit and

loss account and other operative data.

“Analyzing financial statements” by Metcalf and Titard

“Financial analysis is a process of evaluating the relationship between component parts of a

financial statement to obtain a better understanding of a firms position and performance” by

Myers

The purpose of financial analysis is to diagnose the information contained in financial

statements so as to Jude the profitability and financial soundness of the firm. Just like a

doctor examines his patient by recording his body temperature, blood pressure , ect. Before

making his conclusion regarding the illness and before giving his treatment, a financial

analyst analysis the financial statements with various tools of analysis before commenting

upon the financial health or weaknesses of an enterprise .

The analysis and interpretation of financial statements is essential to bring out the mystery

behind the figures in financial statements. Financial statements analysis is an attempt to

determine the significance and meaning of the financial statement data so that forecast may

be made of the future earnings, ability to pay interest and debt maturities (both current and

long term) and profitability of a sound divided policy.

METHODS / TECHNIUQES OF FINANCIAL ANALYSIS:-

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The following methods of analysis are generally used:-

1. Comparative Statements.

2. Trend Analysis.

3. Common-Size Statements.

4. Ratio Analysis

5. Statement Of Changes In Working Capital

COMPARATIVE STATEMENTS

COMMON SIZE STATEMENT:-

The common-size statements, balance sheet and income statement are show in analytical

percentages. The figures are shown as percentages of total assets, total liabilities and total

sales. The total assets are taken as 100 and different assets are expressed as a percentage of

the total similarly, various liabilities are taken as a part of total liabilities.

COMMON SIZE BALANCE SHEET:-

A statement in which balance sheet items are expressed as the ratio of each asset to total
assets and the ratio of each liability is expressed as a ratio of total liabilities is called common
size balance. The common size balance sheet can be used to compare companies of differing
size. The comparison of figures in different periods is not useful because total figures may be
affected by a number of factors. It is not possible to establish standard norms for various
assets. The trends of figures from year to year may not be studied and even they may not give
proper results.

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2.2 ARTICLES

Article - 1

Title : Financial Statement Analysis and Beta and Size Effect

Author : Lianzan xu
Journal : International Journal of Commerce and Management
(Vol.13, Issue 1)

Year : 2003

ABSTRACT

This study examines the ability of fundamental summary measure to predict earnings

change for the subsequent year, the association of and stock returns, and the relationship

between and risk factors beta and size. is a probability index generated by logistic model

and financial statement data. Beta effect is minimized by grouping firms into beta portfolios

while size is controlled through incorporating size as an independent variable in the

regression models. Evidence from the study indicates that has a strong ability to predict

future earnings change and has a positive and significant association with adjusted market

returns, after controlling for beta. Association with adjusted market returns is mitigated when

beta and size are controlled simultaneously.

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Article- 2

Title : A Study on Financial Statement Analysis

Author : Sassikala

Journal : Junral of Business and Financial Affairs 07 (02).

Year : January, 2018

ABSTRACT

This project report entitled as “A Study on Financial Statement Analysis. In Tamil

Nadu Newsprint and Papers Limited, Kagithapuram” is done as a part of MBA

curriculum. The objective of the study is to analysis the financial statement of Tamil

Nadu Newsprint and Papers Limited, Kagithapuram. The study is carried for a period of

five years from 2012-2014 to 2017-2018. Data were collected from the secondary

sources. To identify the financial statements of the company and also understand the

liquidity position. The tools used for analysis, Comparative Balance Sheet, Common Size

Balance Sheet, Ratio Analysis.

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 Article -3

Title : Dog Concierges, LLC: Transaction Analysis and Statement of

Cash Flows Preparation

Author : Mark E. Haskins

Journal : Darden Business publishing cases, ISSN: 2474-7890

Year : 20th January, 2017.

ABSTRACT

This case is appropriate in a MBA module for the accounting process and is also an

excellent exam case. It provides a diagram of the three basic financial statements (Balance

Sheet, income Statement, and Statement of Cash Flows) used to capture, codify, and

communicate the effects of a series of typical business events. The case also gives students the

opportunity to prepare a simple statement of cash flows using two sequential balance sheets

and to work backward from a balance sheet and statement of cash flows to craft the beginning

of the year's balance sheet.

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Article- 4

Title : Working Capital Management through Financial Statements

Author : Sukamal Datta

Journal : Management Accountant: Vol.30, No.11, PP 826-832.

Year : 2013

ABSTRACT

In his study entitled "Working Capital Management through Financial Statement:

Analysis of Paper Industry in West Bengal" found that most of the firms were suffering from

shortage of working capital. One of the primary causes of such shortage of working capital

was that most of the firms under study were not capable of earning adequate profit and were

also suffering from losses. The expansion of fixed assets also caused the working capital

crisis. The utilization of fund had not been covered by sufficient amount of fund by way of

long-term investment

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Article- 5

Title : The prediction of stock returns using financial statement

information
Author : Robert Wholthausen, DavidFlarcker
Journal : Journal of Accounting & Economics Vol.15
Year : 2015

ABSTRACT

We examine the profitability of a trading strategy which is based on a model

designed to predict the sign of subsequent twelve-month excess returns from

accounting ratios. Over the 1978–1988 period, the average annual excess

return produced by the trading strategy ranges between 4.3% and 9.5%,

depending on the specific measure of excess return and weighting scheme

involved. However, our implementation of the and Penman (1989) trading

strategy in the 1978–1988 period, which is based on a model that predicts

subsequent unexpected earnings- per-share from accounting ratios, does not

earn excess returns.

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INDUSTRY PROFILE
In India, the banks and banking have been divided in different groups. Each group has their
own benefits and limitations in their operations. They have their own dedicated target market.
Some are concentrated their work in rural sector while others in both rural as well as urban.
Most of them are only catering in cities and major towns.
The banking system plays an important role in promoting economic growth not only by
channeling savings into investments but also by improving allocate efficiency of resources.
The recent empirical evidence, in fact, suggests that banking system contributes to economic
growth more by improving the allocate efficiency of resources than by channeling of
resources from savers to investors. An efficient banking system is now regarded as a
necessary pre-condition for growth.
The banking system of India consists of the central bank (Reserve Bank of India - RBI),
commercial banks, cooperative banks and development banks (development finance
institutions). These institutions, which provide a meeting ground for the savers and the
investors, form the core of India’s financial sector. Through mobilization of resources and
their better allocation, banks play an important role in the development process of
underdeveloped countries.
BANKING DEVELOPMENT AND NATIONALIZATION OF BANKS IN
INDIA
Banking development in India has been, by and large, a state-induced activity. The Reserve
Bank of India was nationalized in 1949 followed by the nationalization of Imperial Bank of
India (now the State Bank of India - SBI) in 1955. In 1969, 14 major commercial banks were
nationalized and the exercise was repeated when 6 more commercial banks were nationalized
in 1980. Thus, prior to economic reforms initiated in early 1990s, banking business in India
was a near-monopoly of the Government of India.
The underlying philosophy of this approach was to encourage growth, via availability of
adequate credit at reasonable/concessional rates of interest, in areas where commercial
considerations did not allow for disbursal of credit.
THE FINANCIAL SECTOR IN INDIA
Along with the rest of the economy and perhaps even more than the rest, financial markets in
India have witnessed a fundamental transformation in the years since liberalization. The
going has not been smooth all along but the overall effects have been largely positive.

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Nationalization of commercial banks was a mixed blessing. After nationalization there was a
shift of emphasis from industry to agriculture. The country witnessed rapid expansion in bank
branches, even in rural areas. However, bank nationalization created its own problems like
excessive bureaucratization, red-tapism and disruptive tactics of trade unions of bank
employees. It was in this backdrop that wide-ranging banking sector reforms were introduced
as an integral part of the economic reforms programme started in early 1990s and which is
still under way.
The Indian banking sector has witnessed wide ranging changes under the influence of the
financial sector reforms initiated during the early 1990s. The approach to such reforms in
India has been one of gradual and non-disruptive progress through a consultative process.
The emphasis has been on deregulation and opening up the banking sector to market forces.
The Reserve Bank has been consistently working towards the establishment of an enabling
regulatory framework with prompt and effective supervision as well as the development of
technological and institutional infrastructure.
Persistent efforts have been made towards adoption of international benchmarks as
appropriate to Indian conditions. While certain changes in the legal infrastructure are yet to
be effected, the developments so far have brought the Indian financial system closer to global
standards.
Private banks are today increasingly displacing nationalized banks from their positions of
pre-eminence. Though the nationalized State Bank of India (SBI) remains the largest bank in
the country by far, private banks like ICICI Bank, Axis Bank and HDFC Bank have emerged
as important players in the retail banking sector.
Though spawned by government-backed financial institutions in each case, they are profit-
driven professional enterprises.

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COMPANY PROFILE
ICICI Bank is India's largest private sector bank with total assets of Rs. 6,461.29 billion (US$
103 billion) at March 31, 2015 and profit after tax Rs. 111.75 billion (US$ 1,788 million) for
the year ended March 31, 2015. ICICI Bank currently has a network of 4,070 Branches and
13,235 ATM's across India.
HISTORY
1955
The Industrial Credit and Investment Corporation of India Limited (ICICI) incorporated at
the initiative of the World Bank, the Government of India and representatives of Indian
industry, with the objective of creating a development financial institution for providing
medium-term and long-term project financing to Indian businesses. Mr. A.Ramaswami
Mudaliar was elected as the first Chairman of ICICI Limited.
ICICI emerges as the major source of foreign currency loans to Indian industry. Besides
funding from the World Bank and other multi-lateral agencies, ICICI was also among the
first Indian companies to raise funds from international markets.
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was
reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering
in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of
Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by
ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at
the initiative of the World Bank, the Government of India and representatives of Indian
industry. The principal objective was to create a development financial institution for
providing medium-term and long-term project financing to Indian businesses.
In the 1990s, ICICI transformed its business from a development financial institution
offering only project finance to a diversified financial services group offering a wide variety
of products and services, both directly and through a number of subsidiaries and affiliates
like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or
financial institution from non-Japan Asia to be listed on the NYSE.
After consideration of various corporate structuring alternatives in the context of the
emerging competitive scenario in the Indian banking industry, and the move towards
universal banking, the managements of ICICI and ICICI Bank formed the view that the
merger of ICICI with ICICI Bank would be the optimal strategic alternative for both entities,

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and would create the optimal legal structure for the ICICI group's universal banking strategy.
The merger would enhance value for ICICI shareholders through the merged entity's access
to low-cost deposits, greater opportunities for earning fee-based income and the ability to
participate in the payments system and provide transaction-banking services. The merger
would enhance value for ICICI Bank shareholders through a large capital base and scale of
operations, seamless access to ICICI's strong corporate relationships built up over five
decades, entry into new business segments, higher market share in various business segments,
particularly fee-based services, and access to the vast talent pool of ICICI and its subsidiaries.
In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger of
ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial
Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was
approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court of
Gujarat at Ahmadabad in March 2002, and by the High Court of Judicature at Mumbai and
the Reserve Bank of India in April 2002. Consequent to the merger, the ICICI group's
financing and banking operations, both wholesale and retail, have been integrated in a single
entity.

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PROPOSED OUTCOMES
Even though company is utilizing its own funds there is very need that company should
improve its liquidity position, debtors collection period. Utilization of proper management of
its current assets and current liabilities. The company has to lookout new joint ventures and
assignments. To meet the short term requirements the company has to raise short term as well
as long term loans. To attract to the new customers the company has to adapt new procedures
and new technology.

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 LIMITATION
 It is only a study of interim reports.
 Financial analysis is based upon only monetary information and non monetary
factors are ignored.
 Different people may interpret the same analysis in different ways.
 It does not consider the changes in prices level.
Changes in accounting procedure by firm may often make financial analysis misleading

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 CHAPTERISATION

CHAPTER -1 - INTRODUCTION

This chapter includes the introduction of the topic, need, scope, objectives of the study,
Project limitations and methodology of the study.

CHAPTER - 2 REVIEW OF LITERATURE

This chapter includes the theoretical background and articles written by different authors and
brief explanation of the topic.

CHAPTER - 3 - INDUSTRY PROFILE & COMPANY PROFILE

CHAPTER - 4 - DATA ANALYSIS AND INTERPRETATION

This chapter includes the comparative analysis of the financial statements of the five years
data and it also includes the interpretation based on the study.

CHAPTER - 5 – SUMMARY AND CONCLUSION

This chapter includes the overall summary of the project and the conclusion based on the
study during the period.

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 BIBLIOGRAPHY

1. Khan, M Y and P K Jain, Financial Management, Tata McGraw-

Hill Publishing Co., New Delhi, 2007.

2. I M Pandey, Essentials of Financial Management, Vikas Publishing

House Pvt Ltd, New Delhi, 1995.

3. Ramesh, S and A Gupta, Venture Capital and the Indian Financial

Sector, Oxford university press, New Delhi, 1995.

website:
www.googlefinance.com
www.drreddys.com

www.workingcapitalmanagement.com
www.icicibank.com
www.autoindia.com

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