Chapter 1

Executive Summary

1
Analysis and interpretation of the financial statement has now
become an important technique of credit appraisal. Though the basic
technique of appraisal remains the same in all the cases but the
approach and the emphasis in analysis vary. Analysis of financial
statement is necessary because it help in depicting the financial
position on the basis of past and current records. Analysis of
financial statement helps in making the future decision and
strategies. Therefore, it is very necessary for every organization
whether it is a financial or manufacturing etc. to make financial
statement and to analysis it.

ICICI Bank was originally promoted in 1994 by ICICI Limited, an

Indian financial institution, and was its wholly owned subsidiary.
Income statements of the ICICI motors for years 99-00 to 05-06 are
the business mirrors, which reflect the financial position and
operating strength and weakness of the concern. Income statement
analysis which is done by using ratio analysis and trend analysis give
the true picture of the company. Cost reduction is the true medicine
for the revival of the company during the decline of the company
which is studied in this project. The big positive of the cost reduction
initiative goes beyond the statistics of money saved. The crisis
unified the company. Companies have emerged from this as phoenix

2
In order to understand and analysis Ratio I have used profit and loss
and balance sheet of both banks. The analysis showed various
aspect of bank regarding their financial system. Observation also
indicated most widely emphasized goal of the firm is to maximize the
value of the firm to it’s to meet the long term and short term
requirements. Funds are invariably required to carry on the various
activities of a business. on the basis of ratio analysis I have
suggested some issues which will helpful to bank regarding their
financial systems analysis of financial statements helped me to know
how ration analysis helps the banker to know the financial position of
the business. Among the various tools for evaluating the financial
statements, ratio analysis is the most widely used tool, as it helps us
to measure the financial and operational performance of any
business.
In this project, the concepts of Cost reduction are used in such a
manner that it can be made more effective, emphasizing more on the
role of management, explaining the factor behind success and failure
of such analysis within the organization, accentuating its application
in Banking Sector and also highlighting Cost reduction concept, cost
reduction process & strategies and so on. There is a case study on
Cost reduction programmers in ICICI Bank.

3
 Chapter 2

Introduction

4
Every financial manager is involved in financial decision making and
financial planning in order to take right decision at right time, he
should be equipped with sufficient past and present information about
the firm and its operations and how it is changing overtime. Much of
this information that is used by financial manager to take various
decisions and to plan for the future is derived from the financial
statements. The project, is to analyze the financial statements and to
study different ratios over the period of 5 years to determine the
financial position of ICICI Bank.
Financial analysis involves the use of various financial statements.
These statements do several things. First, the balance sheet
summarizes the assets, liabilities and owners equity of a business at
moment in time, usually the end of a year or a quarter. Next the
income statement summarizes the revenues and expenses of the
firm over a period of time while balance sheet represents a snapshot
of the firm s financial position at a moment in time.
Financial management is planning and controlling of financial
resources of a firm with a specific objective. Since, financial
management as a separate discipline is of recent origin, it is still in a
developing stage. It is very crucial for an organization to manage its
funds effectively and efficiently. Financial management has assumed
greater importance today as the financial strategies required to
survive in the competitive environment have become very important.

5
In the financial markets also new instruments and concepts are
coming and one must say that a finance manager of today is
operating in a more complex environment. A study of theories and
concepts of financial management has therefore become a part of
paramount importance for academics as well as for practitioners but
there are many concepts and theories about which controversies
exist as no unanimous opinion is reached as yet. The project, further
aims at discussing and understanding the concepts of financial
management of ICICI Bank; the functions expect to be performed by
the financial management as well as the objectives of financial
managements.

6
 Chapter 3

Objective of study

7
Objective of study

• To Analysis ICICI Bank Financial Statement

• To understand the importance of financial statement analysis,
calculate the ratios, and also analyze them.
• To study the ICICI Bank financial position and market standing
through the ratio Analysis and cost reduction programmes
• Through the net profit ratio and other profitability ratio,
understand the profitability position of ICICI bank.
• Evaluating company’s performance relating to Financial
Statement Analysis.
• To know the liquidity position of the company, with the help of
Current ratio.
• How the Cost Reduction process works.

8
 Chapter 4

Research Methodology

9
Research methodology

Research Methodology is a systematic method of discovering new

facts or verifying old facts, their sequence, inter-relationship, casual
explanation and the natural laws which governs them.
It covers the systematic approach concerning generalization and the
formulation of the theory. Different stages involved in research
consists of enacting the problem, formulating a hypothesis, collecting
the facts or data, analyzing the facts and reaching certain conclusion
either in the form of solution towards the concerned problem or in
generalization for some theoretical formulation.
The main objective of the study is to determine and analyze the
financial position by two ways:

1. Primary Data:
• Ratio Calculation
• Graphical Representation
• Interviews with finance manager.

10
2. Secondary Data:

Secondary data consist of the information that already exists or

someone has collected it for specific purpose. This data was
collected by:
• The company profile was collected from website of
www.icicibank.com
www.icicidirect.com

• Books related to Financial Management.

• Reference to the various report, material, published by the

company.

11
 Chapter 5

Limitations of the study

12
Limitations of the study

• The limitations of the study can be as follows in the process of

the research.
• Companies are being heisted to provide to right or valid data
which is mush important for study.
• Consumption Time frame
• Primary data can be bias depending upon the individuals view
• Dynamic market economy and business opportunities
• Position of Indian economy in coming years

13
 Chapter 6

Review of literature

Strategic and Financial Performance Implications of Global

Sourcing Strategy: A contingency Analysis
14
“ Using a contingency model of global sourcing strategy, this study
investigated the moderating effects of sourcing – related factors on
the relationship between sourcing strategy and a product’s strategic
and financial performance. The results lent some support to the
contingency model of global sourcing strategy in that product
innovation, process innovation and asset specificity were significant
moderator variables for financial, but not strategic , performance.
However, the results provided no support for bargaining power of
suppliers and transaction frequency as moderator variables. In other
words, in achieving high financial performance for a product, whether
a particular sourcing strategy should be used for a particular product
depended on the levels of product innovation , process innovation
and asset specificity”

Several unique financial characteristics differentiate a cooperative

from an investor-oriented firm (IOF). When evaluating the
cooperative’s performance, comparing a cooperative’s financial
position with an IOF can be misleading for those unfamiliar with these
characteristics. This report was written to help boards and managers
assess the financial performance of their cooperatives and to
familiarize potential creditors with the unique financial characteristics
and performance of cooperatives.

15
This study discusses the differences in financial management and
goals of cooperatives versus IOFs. It starts by discussing the
contents of the various cooperative financial statements and follows
with a view of common sizing statements for analysis.
Next, it reviews the usefulness of standard financial ratios applied to
the cooperative framework. A brief review shows what lenders look
for when analyzing potential borrowers.
Finally, financial ratios are developed to build on these standards
with an eye toward a comprehensive understanding of a cooperative
s performance. Ratios will be related to data during the last 18 years
from the largest agricultural cooperatives.

16
Environmental and Financial Performance Literature

“ We review the growing literature relating corporate environmental

performance to financial performance. We seek to identify
achievements and limitations of this literature and to highlight areas
for further research. Our primary interest is to assess the adequacy
of the literature in informing corporate managers how, when, and
where to make pro-environment investments that will pay off with
financial returns for long-term shareholders. To do so , we create a
conceptual framework that maps the influence of regulators, public
health scientists , environmental advocates , consumers, employees,
and other interested parties upon corporate financial returns. Our
decision has relevance to all parties interested in influencing
corporate actions affect the environment .”

17
Financial System Analysis: A Functional View by Mariko FUJII
(Research Center for Advanced Economic Engineering,
University of Tokyo)

The Financial system plays a fundamental role in the economic

system in facilitating the transfer of resources and provision of
settlement services, liquidity and price information, among others.
Under the recent economic situations where uncertainty of future
economic variables have more widely prevailed, the function to
provide tools for trading and sifting risks has increased its
importance. Depending on how such mechanism is provided,
economic welfare of the agents may differ substantially. Functional
approach to the financial systems is quite helpful to examine the role
of specific institutions and design of the financial system and to
evaluate them in the light of current economic developments. In this
note, the functions of financial systems are reviewed from the
viewpoints described above and the modern developments of
financial institutions are considered for evaluation.
Banks and financial markets are two basic structures that consist of
the financial system, and they may be distinct in the way they
perform the financial functions. In recent years, financial markets
seem to have increased their relative weight in many economies
because they can deal with a wide variety of products to trade risks,
which have been made available by virtue of the advancement of
technologies, but also can aggregate opinions through the
decentralized decision-making processes. These characteristics of
financial markets, in comparison with banks, are inherent in market
18
mechanism itself, and may work well under rapidly changing and
rather uncertain economic conditions.
As a matter of course, banks and financial markets are both
essential to the economy and interacting each other. Some of
relatively newly developed financing methods such as venture capital
and securitization could be regarded as resulting products of the
interactions of banks and financial markets.
It is important to understand under what conditions a particular
financial structure of institutions emerges. For this purpose, the
analysis to deal with banks and financial markets in a consolidated
framework is interesting and would be the direction of future
research.

19
 Chapter 7

Introduction to Financial Analysis

20
7.1.1 Introduction:

A Financial Statement is a compilation of data, which is logically and

consistently organized according to accounting principles. Its purpose
is to convey an understanding of some financial aspects of a
business firm. It shows a position at a movement in time, as in the
case of balance sheet, or reveals a series of activities over a given
period of time, as in the case of an income statement. Financial
statements are the major means through which firms present their
financial situation to stock holders, creditors and general public. The
majority of firms which include extensive financial statements in their
annual reports, which receive wide distribution.

Nature of financial statement Analysis:

Financial Statement Analysis consist of the application of analytical

tools and techniques to the data in financial statements in order to
derive from them measurements and relationships that are significant
and useful for decision making. The process of financial analysis can
be described in various ways, depending on the objectives to be
obtained. Financial analysis can be used as a preliminary screening
tool in the selection of stocks in the secondary market. It can be used
as a forecasting tool for future financial conditions and results. It may
be used as a process of evaluation and diagnosis of managerial,
operating or other problem areas. Above all, financial analysis
reduces reliance on intuition, guesses and thus narrows the areas of

21
uncertainty that is present in all decision making processes. Financial
analysis does not lesson the need for judgment but rather establishes
a sound and systematic basis for its rational application.

Sources of Financial Information:

The financial data needed in financial analysis come from many

sources. The primary source is the data provided by the firm itself in
its annual report and required disclosures. The annual report
comprises the income statement, the balance sheet, and the
statement of cash flows, as well as footnote to these statements.
Besides this information such as the market price of securities
publicly traded corporations can be found in the financial 20 press
and the electronic media daily. The financial press also provides
information to stock price indices for industries and for market as a
whole.

7.1.2 History of financial Analysis

22
Analysis of financial statements has had its greatest growth since
1990 s. A major impetus came from increasing need from increasing
need on the part of grantors of commercial credit such as bankers,
financial institutions etc, to understand the condition of their
customer. At the same time businessman need to understand their
own conditions of their own enterprise in order to assure its survival
in stress of competition. Satisfaction of these needs has been
assisted by the continuous development of accounting as a science
and passing of income tax law in1993. This required preparation of
balance sheets and income statements, as they are the basic
statements required for the income tax purpose. Thus a reasonably
reliable data from which typical financial ratios could be calculated
has become increasingly available. Between 1919 and 1929 four
men pioneered in development of financial ratios. These where
James bliss who published a book on this subject in 1923. Alexander
wall, head of Robert Morris associates and Raymond W Dunning,
published a work on this subject in 1928 and Roy Foulke, who made
some of the first detailed compilations and studies between 1925 and
1928.

23
Users of Accounting Information

The list of categories of readers and users of accounts includes the

following people and groups of people:
• Investors
• Lenders
• Managers of the organization
• Employees
• Suppliers and other trade creditors
• Customers
• Governments and their agencies
• Public
• Financial analysts
• Environmental groups
• Researchers: both academic and professional

7.1.3 Advantages of Financial Statement Analysis

24
There are various advantages of financial statements analysis. The
major benefit is that the investors get enough idea to decide about
the investments of their funds in the specific company. Secondly,
regulatory authorities like International Accounting Standards Board
can ensure whether the company is following accounting standards
or not. Thirdly, financial statements analysis can help the government
agencies to analyze the taxation due to the company. Moreover,
company can analyze its own performance over the period of time
through financial statements analysis.

7.1.4 Limitations of Financial Statement Analysis:

Comparison of one company with another can provide valuable clues

about the financial health of an organization. Unfortunately,
differences in accounting methods between companies sometimes
make it difficult to compare the companies financial data. For
example if one firm values its inventories by LIFO method and
another firm by the average cost method, then direct comparison of
financial data such as inventory valuations and cost of goods sold
between the two firms may be misleading. Sometimes enough data
are presented in foot notes to the financial statements to restate data
to a comparable basis. Otherwise, the analyst should keep in mind
the lack of comparability of the data before drawing any definite
conclusion.

25
7.2 The Principal Tools of Analysis:

In the analysis of financial statements, the analyst can have a variety

of tools available from which he can choose the best suited to his
specific purpose. The following are the important tools of analysis.
The Principles Tools/Techniques of Financial Analysis:

26
Figure 1 Classification of Financial Analysis

Tools of
Financial
Analysis

Ratio
Trend Common size Comparative
Analysis
Analysis statement Statement

27
7.2.1 Trend Analysis

An aspect of technical analysis that tries to predict the future

movement of a stock based on past data. Trend analysis is based on
the idea that what has happened in the past gives traders an idea of
what will happen in the future.
There are three main types of trends: short-, intermediate- and long-
term. Trend Analysis Analysts make a trend analysis of performance
over the past five to ten years to get an overall picture. Trend
analysis is made in respect of sales, cost of sales, gross profit, net
profit (before tax), net profit (after tax), net worth, debt, dividend
policy, bonus and Rights issues, return on net worth, earnings per
share, etc.

7.2.2 Common Size Statements

Definition and Explanation of Vertical Analysis and Common Size

Statements: Vertical analysis is the procedure of preparing and
presenting common size statements.
Common size statement is one that shows the items appearing on it
in percentage form as well as in dollar form. Each item is stated as a
percentage of some total of which that item is a part. Key financial
changes and trends can be highlighted by the use of common size

28
statements. Common size statements are particularly useful when
comparing data from different companies.

The information it contains in the selection, reclassification and

summarization of the data contained in profit and loss account and
balance sheet, it is no way replacement of either these statements.
To provide a comparative view of movement of funds by the
statement of changes in financial position is prepared for the period
covered by the profit and loss account as well as the corresponding
previous period.

7.2.3 Comparative Statement

Comparative statements are financial statements that cover a

different time frame, but are formatted in a manner that makes
comparing line items from one period to those of a different
period an easy process. This quality means that the comparative
statement is a financial statement that lends itself well to the
process of comparative analysis. Many companies make use of
standardized formats in accounting functions that make the
generation of a comparative statement quick and easy. The
benefits of a comparative statement are varied for a corporation.
Because of the uniform format of the statement, it is a simple
process to compare the gross sales of a given product or all products
of the company with the gross sales generated in a previous month,
quarter, or year. Comparing generated revenue from one period to a
29
different period can add another dimension to analyzing the
effectiveness of the sales effort, as the process makes it possible to
identify trends such as a drop in revenue in spite of an increase in
units sold.

Along with being an excellent way to broaden the understanding of

the success of the sales effort, a comparative statement can also
help address changes in production costs. By comparing line items
that catalog the expense for raw materials in one quarter with another
quarter where the number of units produced is similar can make it
possible to spot trends in expense increases, and thus help isolate
the origin of those increases. This type of data can prove helpful to
allowing the company to find raw materials from another source
before the increased price for materials cuts into the overall
profitability of the company.

A comparative statement can be helpful for just about any

organization that has to deal with finances in some manner.
Even non-profit organizations can use the comparative
statement method to ascertain trends in annual fund raising
efforts. By making use of the comparative statement for the
most recent effort and comparing the figures with those of the
previous year’s event, it is possible to determine where
expenses increased or decreased, and provide some insight in
how to plan the following year’s event.

30
7.2.4 Ratio Analysis:

This is the important tool available to financial analyst for their work.
An accounting ratio shows the relationship in mathematical terms
between two interrelated accounting figures. Fundamental Analysis
has a very broad scope. One aspect looks at the general (qualitative)
factors of a company. The other side considers tangible and
measurable factors (quantitative). This means crunching and
analyzing numbers from the financial statements. If used in
conjunction with other methods, quantitative analysis can produce
excellent results.
Ratio analysis isn't just comparing different numbers from the
balance sheet, income statement, and cash flow statement. It's
comparing the number against previous years, other companies, the
industry, or even the economy in general. Ratios look at the
relationships between individual values and relate them to how a
company has performed in the past, and might perform in the future.
A ratio is one figure express in terms of another figure. It is a
mathematical yardstick that measures the relationship two figures,

31
which are related to each other and mutually interdependent. Ratio is
express by dividing one figure by the other related figure. Thus a ratio
is an expression relating one number to another. It is simply the
quotient of two numbers.

7.2.4.1 MEANING OF RATIO ANALYSIS:

Ratio analysis is the method or process by which the relationship of

items or group of items in the financial statement are computed,
determined and presented. Ratio analysis is an attempt to derive
quantitative measure or guides concerning the financial health and
profitability of business enterprises. Ratio analysis can be used both
in trend and static analysis. There are several ratios at the disposal of
an annalist but their group of ratio he would prefer depends on the
purpose and the objective of analysis.
While a detailed explanation of ratio analysis is beyond the scope of
this section, we will focus on a technique, which is easy to use. It can
provide you with a valuable investment analysis tool. This technique
is called cross-sectional analysis. Cross-sectional analysis compares
financial ratios of several companies from the same industry. Ratio
analysis can provide valuable information about a company's
financial health. A financial ratio measures a company's performance
in a specific area. For example, you could use a ratio of a company's
debt to its equity to measure a company's leverage. By comparing
the leverage ratios of two companies, you can determine which

32
company uses greater debt in the conduct of its business. A
company whose leverage ratio is higher than a competitor's has more
debt per equity. You can use this information to make a judgment as
to which company is a better investment risk. However, you must be
careful not to place too much importance on one ratio. You obtain a
better indication of the direction in which a company is moving when
several ratios are taken as a group.

7.2.4.2 OBJECTIVE OF RATIOS

Ratio is work out to analyze the following aspects of business

organization-

1. Solvency-
• Long term
• Short term
• Immediate
2. Stability
3. Profitability
4. Operational E) Credit standing
5. Structural analysis
6. Effective utilization of resources
7. Leverage or external financing
8. Standardize financial information for comparisons
9. Evaluate current operations efficiency
10. Compare performance with past performance

33
 11. Compare performance against other firms or industry
standards.
12. Study the efficiency of operations efficiency
13. Study the risk of operations

7.2.4.3FORMS OF RATIO:

Since a ratio is a mathematical relationship between to or more

variables accounting figures, such relationship can be expressed in
different ways as follows –

A] As a pure ratio:
For example the equity share capital of a company is Rs.
20,00,000 & the preference share capital is Rs. 5,00,000, the
ratio of equity share capital to preference share capital is
20,00,000: 5,00,000 or simply 4:1.

B] As a rate of times:
In the above case the equity share capital may also be
described as 4 times that of preference share capital. Similarly,
the cash sales of a firm are Rs. 12,00,000 & credit sales are
Rs. 30,00,000. so the ratio of credit sales to cash sales can be
described as 2.5 [30,00,000/12,00,000] or simply by saying that
the credit sales are 2.5 times that of cash sales.

34
C] As a percentage:
In such a case, one item may be expressed as a percentage of
some other item.
For example, net sales of the firm are Rs.50,00,000 & the
amount of the gross profit is Rs. 10,00,000, then the gross
profit may be described as 20% of sales [ 10,00,000/50,00,000]

7.2.4.4 STEPS IN RATIO ANALYSIS

The ratio analysis requires two steps as follows:

1] Calculation of ratio
2]Comparing the ratio with some predetermined standards. The
standard ratio may be the past ratio of the same firm or industry’s
average ratio or a projected ratio or the ratio of the most successful
firm in the industry. In interpreting the ratio of a particular firm, the
analyst cannot reach any fruitful conclusion unless the calculated
ratio is compared with some predetermined standard. The
importance of a correct standard is oblivious as the conclusion is
going to be based on the standard itself.

35
7.2.4.5 TYPES OF COMPARISONS

The ratio can be compared in three different ways –

1] Cross section analysis:
One of the way of comparing the ratio or ratios of the firm is to
compare them with the ratio or ratios of some other selected
firm in the same industry at the same point of time. So it
involves the comparison of two or more firm’s financial ratio at
the same point of time. The cross section analysis helps the
analyst to find out as to how a particular firm has performed in
relation to its competitors. The firms performance may be
compared with the performance of the leader in the industry in
order to uncover the major operational inefficiencies. The cross
section analysis is easy to be undertaken as most of the data
required for this may be available in financial statement of the
firm.

2] Time series analysis:

The analysis is called Time series analysis when the

performance of a firm is evaluated over a period of time. By

36
 comparing the present performance of a firm with the
performance of the same firm over the last few years, an
assessment can be made about the trend in progress of the
firm, about the direction of progress of the firm. Time series
analysis helps to the firm to assess whether the firm is
approaching the long-term goals or not.
The Time series analysis looks for (1) important trends in financial
performance (2) shift in trend over the years (3) significant deviation if
any from the other set of data.

3] Combined analysis:

If the cross section & time analysis, both are combined together
to study the behavior & pattern of ratio, then meaningful &
comprehensive evaluation of the performance of the firm can
definitely be made. A trend of ratio of a firm compared with the
trend of the ratio of the standard firm can give good results. For
example, the ratio of operating expenses to net sales for firm
may be higher than the industry average however, over the
years it has been declining for the firm, whereas the industry
average has not shown any significant changes.

The combined analysis as depicted in the above diagram, which

clearly shows that the ratio of the firm is above the industry average,
but it is decreasing over the years & is approaching the industry
average.

37
7.2.4.6 PRE-REQUISITIES TO RATIO ANALYSIS

In order to use the ratio analysis as device to make purposeful

conclusions, there are certain pre-requisites, which must be taken
care of. It may be noted that these prerequisites are not conditions
for calculations for meaningful conclusions. The accounting figures
are inactive in them & can be used for any ratio but meaningful &
correct interpretation & conclusion can be arrived at only if the
following points are well considered.
1) The dates of different financial statements from where data is
taken must be same.
2) If possible, only audited financial statements should be
considered, otherwise there must be sufficient evidence that the data
is correct.
3) Accounting policies followed by different firms must be same in
case of cross section analysis otherwise the results of the ratio
analysis would be distorted.
4) One ratio may not throw light on any performance of the firm.
Therefore, a group of ratios must be preferred. This will be
conductive to counter checks.

38
5) Last but not least, the analyst must find out that the two figures
being used to calculate a ratio must be related to each other,
otherwise there is no purpose of calculating a ratio

7.2.4.7 CLASSIFICATION OF RATIO

39
Figure 2 Classification of Ratio

40
 CLASSIFICATION
OF RATIO

BASED ON
BASED ON BASED ON USER
FINANCIAL
FUNCTION STATEMENT

FOR SHORT TERM

CREDITORS
FOR SHAREHOLDER
RATIOS

LIQUIDITY RATIO MANAGEMENT

BALANCE SHEET
LEVERAGE RATIO For LONGTERM
REVENUE
PROFITABILITY CREDITORS
STATEMENT RATIO
RATIO
COMPOSITE RATIO
COVERAGE RATIO

BASED ON FINANCIAL STATEMENT

41
Accounting ratios express the relationship between figures taken
from financial statements. Figures may be taken from Balance
Sheet , P& P A/C, or both. One-way of classification of ratios is
based upon the sources from which are taken.

1] Balance sheet ratio:

If the ratios are based on the figures of balance sheet, they are called
Balance Sheet Ratios. E.g. ratio of current assets to current liabilities
or ratio of debt to equity. While calculating these ratios, there is no
need to refer to the Revenue statement.
These ratios study the relationship between the assets & the
liabilities, of the concern. These ratio help to judge the liquidity,
solvency & capital structure of the concern. Balance sheet ratios are
Current ratio, Liquid ratio, and Proprietary ratio, Capital gearing ratio,
Debt equity ratio, and Stock working capital ratio.

2] Revenue ratio:
Ratio based on the figures from the revenue statement is called
revenue statement ratios. These ratio study the relationship between
the profitability & the sales of the concern. Revenue ratios are Gross
profit ratio, Operating ratio, Expense ratio, Net profit ratio, Net
operating profit ratio, Stock turnover ratio.

42
3] Composite ratio:

These ratios indicate the relationship between two items, of which

one is found in the balance sheet & other in revenue statement.
There are two types of composite ratiosa) Some composite ratios
study the relationship between the profits & the investments of the
concern. E.g. return on capital employed, return on proprietors fund,
return on equity capital etc.
Other composite ratios e.g. debtors turnover ratios, creditors turnover
ratios, dividend payout ratios, & debt service ratios

BASED ON FUNCTION:

Accounting ratios can also be classified according to their functions in

to liquidity ratios, leverage ratios, activity ratios, profitability ratios &
turnover ratios.
1] Liquidity ratios:

It shows the relationship between the current assets &

current liabilities of the concern e.g. liquid ratios & current
ratios. Liquidity refers to the ability of a firm to meet its short-term
(usually up to 1 year) obligations. The ratios, which indicate the
liquidity of a company, are Current ratio, Quick/Acid-Test ratio, and
Cash ratio. These ratios are discussed below

43
2] Leverage ratios:

It shows the relationship between proprietors funds & debts used in

financing the assets of the concern e.g. capital gearing ratios, debt
equity ratios, & Proprietory ratios.

3] Activity ratios:

It shows relationship between the sales & the assets. It is also known
as Turnover ratios & productivity ratios e.g. stock turnover ratios,
debtors turnover ratios.

4] Profitability ratios:

a) It shows the relationship between profits & sales e.g. operating

ratios, gross profit ratios, operating net profit ratios, expenses ratios
b) It shows the relationship between profit & investment e.g. return on
investment, return on equity capital.

5] Coverage ratios:

44
It shows the relationship between the profit on the one hand & the
claims of the outsiders to be paid out of such profit e.g. dividend
payout ratios & debt service ratios.

BASED ON USER:

1] Ratios for short-term creditors:

• Current ratios
• liquid ratios
• stock working capital ratios etc.

2] Ratios for the shareholders:

• Return on proprietors fund
• return on equity capital etc.

45
LIQUIDITY RATIO: -

Liquidity refers to the ability of a firm to meet its short-term (usually

up to 1 year) obligations. The ratios, which indicate the liquidity of a
company, are Current ratio, Quick/Acid-Test ratio, and Cash ratio.
These ratios are discussed below

46
CURRENT RATIO

Meaning:

This ratio compares the current assests with the current liabilities. It
is also known as ‘working capital ratio’ or ‘ solvency ratio’. It is
expressed in the form of pure ratio.
E.g. 2:1

47
Formula:

Current Ratio = Current Assets / Current Liabilities

Significance:

The current assests of a firm represents those assets which can be,
in the ordinary course of business, converted into cash within a short
period time, normally not exceeding one year. The current liabilities
defined as liabilities which are short term maturing obligations to be
met, as originally contemplated, with in a year. Current ratio (CR) is
the ratio of total current assets (CA) to total current liabilities (CL).
Current assets include cash and bank balances; inventory of raw
materials, semifinished and finished goods; marketable securities;
debtors (net of provision for bad and doubtful debts); bills receivable;
and prepaid expenses.

Current liabilities consist of trade creditors, bills payable, bank credit,

provision for taxation, dividends payable and outstanding expenses.
This ratio measures the liquidity of the current assets and the ability
of a company to meet its short-term debt obligation. CR measures
the ability of the company to meet its CL, i.e., CA gets converted into
cash in the operating cycle of the firm and provides the funds needed
to pay for CL. The higher the current ratio, the greater the short-term
solvency. This compares assets, which will become liquid within

48
approximately twelve months with liabilities, which will be due for
payment in the same period and is intended to indicate whether there
are sufficient short-term assets to meet the short- term liabilities.
Recommended current ratio is 2: 1. Any ratio below indicates that the
entity may face liquidity problem but also Ratio over 2: 1 as above
indicates over trading, that is the entity is under utilizing its current
assets.

LIQUID RATIO:

Meaning:

Liquid ratio is also known as acid test ratio or quick ratio. Liquid ratio
compare the quick assets with the quick liabilities. It is expressed in
the form of pure ratio. E.g. 1:1. The term quick assets refer to current
assets, which can be converted into, cash immediately or at a short
notice without diminution of value.

Formula:

Liquid ratio = Quick Assets / Current Liabilities

Significance:

49
Quick Ratio (QR) is the ratio between quick current assets (QA) and
CL. QA refers to those current assets that can be converted into cash
immediately without any value strength. QA includes cash and bank
balances, short-term marketable securities, and sundry debtors.
Inventory and prepaid expenses are excluded since these cannot be
turned into cash as and when required. QR indicates the extent to
which a company can pay its current liabilities without relying
on the sale of inventory. This is a fairly stringent measure of liquidity
because it is based on those current assets, which are highly liquid.
Inventories are excluded from the numerator of this ratio because
they are deemed the least liquid component of current assets.
Generally, a quick ratio of 1:1 is considered good. One drawback of
the quick ratio is that it ignores the timing of receipts and payments.

EARNING PER SAHRE:-

Meaning:

Earnings per Share are calculated to find out overall profitability of

the organization. An earnings per Share represents earning of the
company whether or not dividends are declared. If there is only one
class of shares, the earning per share are determined by dividing net
profit by the number of equity shares.EPS measures the profits
available to the equity shareholders on each share held.

50
Formula:

Earning per share = NPAT / Number of equity share

Significance:

The higher EPS will attract more investors to acquire shares in the
company as it indicates that the business is more profitable enough
to pay the dividends in time. But remember not all profit earned is
going to be distributed as dividends the company also retains some
profits for the business

DIVIDEND PAYOUT RATIO:-

Meaning:

Dividend Pay-out Ratio shows the relationship between the dividend

paid to equity shareholders out of the profit available to the equity
shareholders.

Formula:

Dividend Pay out ratio = Dividend per share / Earning per

share *100

51
Significance:

D/P ratio shows the percentage share of net profits after taxes and
after preference dividend has been paid to the preference equity
holders.

CAPITAL GEARING RATIO:-

Meaning:

Gearing means the process of increasing the equity shareholders

return through the use of debt. Equity shareholders earn more when
the rate of the return on total capital is more than the rate of interest
on debts. This is also known as leverage or trading on equity. The
Capital-gearing ratio shows the relationship between two types of
capital viz: - equity capital & preference capital & long term
borrowings. It is expressed as a pure ratio.

Formula:

Capital gearing ratio = Preference capital+ secured loan /

Equity capital & reserve & surplus

52
Significance:

Capital gearing ratio indicates the proportion of debt &

equity in the financing of assets of a concern. If the amount of
fixed cost bearing capital is more than the equity share capital
including reserves an undistributed profits), it will be called high
capital gearing and if it is less, it will be called low capital gearing.
The high gearing will be beneficial to equity shareholders when the
rate of interest/dividend payable on fixed cost bearing capital is lower
than the rate of return on investment in business.
Thus, the main objective of using fixed cost bearing capital is to
maximize the profits available to equity shareholders.

PROFITABILITY

These ratios help measure the profitability of a firm. A firm, which

generates a substantial amount of profits per rupee of sales, can
comfortably meet its operating expenses and provide more returns to
its shareholders. The relationship between profit and sales is
measured by profitability ratios. There are two types of profitability
ratios: Gross Profit Margin and Net Profit Margin.

53
GROSS PROFIT RATIO:-

Meaning:

This ratio measures the relationship between gross profit and sales.
It is defined as the excess of the net sales over cost of goods sold or
excess of revenue over cost.

Formula:

Gross profit ratio = Gross profit / Net sales * 100

Significance:

This ratio shows the profit that remains after the

manufacturing costs have been met. It measures the
efficiency of production as well as pricing. This ratio helps to judge
how efficient the concern is I managing its production, purchase,
selling & inventory, how good its control is over the direct cost, how
productive the concern , how much amount is left to meet other
expenses & earn net profit.

54
NET PROFIT RATIO:-

Meaning:

Net Profit ratio indicates the relationship between the net profit & the
sales it is usually expressed in the form of a percentage.

Formula:

Net profit ratio = NPAT / Net sales * 100

Significance:

This ratio shows the net earnings (to be distributed to both equity and
preference shareholders) as a percentage of net sales. It measures
the overall efficiency of production, administration, selling, financing,
pricing and tax management. Jointly considered, the gross and net
profit margin ratios provide an understanding of the cost and profit
structure of a firm.

55
RETURN ON CAPITAL EMPLOYED:-

Meaning:

The profitability of the firm can also be analyzed from the point of
view of the total funds employed in the firm. The term fund employed
or the capital employed refers to the total long-term source of funds.
It means that the capital employed comprises of shareholder funds
plus long-term debts. Alternatively it can also be defined as fixed
assets plus net working capital. Capital employed refers to the long-
term funds invested by the creditors and the owners of a firm. It is the
sum of long-term liabilities and owner's equity. ROCE indicates the
efficiency with which the long-term funds of a firm are utilized.

Formula:

Return on capital employed = NPAT / Capital employed * 100

Significance :

These ratios determine how quickly certain current assets can be

converted into cash. They are also called efficiency ratios or asset
utilization ratios as they measure the efficiency of a firm in managing
assets. These ratios are based on the relationship between the level

56
of activity represented by sales or cost of goods sold and levels of
investment in various assets
FINANCIAL

These ratios determine how quickly certain current assets can be

converted into cash. They are also called efficiency ratios or asset
utilization ratios as they measure the efficiency of a firm in managing
assets. These ratios are based on the relationship between the level
of activity represented by sales or cost of goods sold and levels of
investment in various assets. The important turnover ratios are
debtors turnover ratio, average collection period, inventory/stock
turnover ratio, fixed assets turnover ratio, andtotal assets turnover
ratio. These are described below:

57
DEBTORS TURNOVER RATIO (DTO)
Meaning:

DTO is calculated by dividing the net credit sales by average debtors

outstanding during the year. It measures the liquidity of a firm's debts.
Net credit sales are the gross credit sales minus returns, if any, from
customers. Average debtors are the average of debtors at the
beginning and at the end of the year. This ratio shows how rapidly
debts are collected. The higher the DTO, the better it is for the
organization.

58
Formula:

Debtors turnover ratio = Credit sales / Average debtors

Significance:

This ratio indicates the speed with which the amount is collected from
debtors. The higher the ratio, the better it is, since it indicates that
amount from debtors is being collected more quickly. The more
quickly the debtors pay, the less the risk from bad- debts, and so the
lower the expenses of collection and increase in the liquidity of the
firm.
By comparing the debtors turnover ratio of the current year with the
previous year, it may be assessed whether the sales policy of the
management is efficient or not.

Average collection period

This ratio indicates the time with in which the amount is collected
from debtors and bills receivables.
Formula:

Average collection period = debtors + bills receivable / credit

sales per day

59
Here, credit sales per day = net credit sales of the year / 365
Average collection period can also be calculated on the bases of
‘debtors turnover ratio’.

The Formula will be:

Average collection period = 12 months or 365 days / debtors

turnover ratio

Significance:

This ratio shows the time in which the customers are paying for credit
sales. A higher debt collection period is thus, an indicates of the
inefficiency and negligence on the part of management. On the other
hand, if there is decrease in debt collection period, it indicates prompt
payment by debtors which reduces the chance of bad debts.

INVENTORY OR STOCK TURNOVER RATIO (ITR)

Meaning:

ITR refers to the number of times the inventory is sold and replaced
during the accounting period.

60
Formula:

Stock Turnover Ratio = COGS / Average stock

Significance:

ITR reflects the efficiency of inventory management. The higher the

ratio, the more efficient is the management of inventories, and vice
versa. However, a high inventory turnover may also result from a low
level of inventory, which may lead to frequent stock outs and loss of
sales and customer goodwill. For calculating ITR, the average of
inventories at the beginning and the end of the year is taken. In
general, averages may be used when a flow figure (in this case, cost
of goods sold) is related to a stock figure (inventories).

FIXED ASSETS TURNOVER (FAT)

The FAT ratio measures the net sales per rupee of investment in
fixed assets.

Formula:

Fixed assets turnover = Net sales / Net fixed assets

61
Significance:

This ratio measures the efficiency with which fixed assets are
employed. A high ratio indicates a high degree of efficiency in asset
utilization while a low ratio reflects an inefficient use of assets.
However, this ratio should be used with caution because when the
fixed assets of a firm are old and substantially depreciated, the fixed
assets turnover ratio tends to be high (because the denominator of
the ratio is very low).

PROPRIETORS RATIO:

Meaning:

Proprietary ratio is a test of financial & credit strength of the business.

It relates shareholders fund to total assets. This ratio determines the
long term or ultimate solvency of the company. In other words,
Proprietary ratio determines as to what extent the owner’s interest &
expectations are fulfilled from the total investment made in the
business operation. Proprietary ratio compares the proprietor fund
with total liabilities. It is usually expressed in the form of percentage.
Total assets also know it as net worth.

62
Formula:

Proprietary ratio = Proprietary fund / Total fund

Significance:

This ratio should be 33% or more than that. In other words, the
proportion of shareholders funds to total funds should be 33% or
more.
A higher proprietary ratio is generally treated an indicator of sound
financial position from long-term point of view, because it means that
the firm is less dependent on external sources of finance.
If the ratio is low it indicates that long-term loans are less secured
and they face the risk of losing their money.

STOCK WORKING CAPITAL RATIO:

Meaning:

This ratio shows the relationship between the closing stock & the
working capital. It helps to judge the quantum of inventories in
relation to the working capital of the business. The purpose of this
ratio is to show the extent to which working capital is blocked in
inventories. The ratio highlights the predominance of stocks in the
current financial position of the company. It is expressed as a
percentage.

63
Formula:

Stock working capital ratio = Stock / Working Capital

Significance:

Stock working capital ratio is a liquidity ratio. It indicates the

composition & quality of the working capital. This ratio also helps to
study the solvency of a concern. It is a qualitative test of solvency. It
shows the extent of funds blocked in stock. If investment in stock is
higher it means that the amount of liquid assets is lower.

DEBT EQUITY RATIO:

MEANING:

Debt equity ratio is also called as leverage ratio. Leverage means the
process of the increasing the equity shareholders return through the
use of debt. Leverage is also known as ‘gearing’ or ‘trading on
equity’. Debt equity ratio shows the margin of safety for long-term
creditors & the balance between debt & equity.

Formula:

Debt equity ratio = Total long-term debt / Total shareholders

fund

64
Significance:

This ratio is calculated to assess the ability of the firm to meet its long
term liabilities. Generally, debt equity ratio of is considered safe.
If the debt equity ratio is more than that, it shows a rather risky
financial position from the long-term point of view, as it indicates that
more and more funds invested in the business are provided by long-
term lenders.
The lower this ratio, the better it is for long-term lenders because they
are more secure in that case. Lower than 2:1 debt equity ratio
provides sufficient protection to long-term lenders.

RETURN ON PROPRIETOR FUND:

Meaning:

Return on proprietors fund is also known as ‘return on proprietors

equity’ or ‘return on shareholders investment’ or ‘ investment ratio’.
This ratio indicates the relationship between net profit earned & total
proprietors funds. Return on proprietors fund is a profitability ratio,
which the relationship between profit & investment by the proprietors
in the concern.

Its purpose is to measure the rate of return on the total fund made
available by the owners. This ratio helps to judge how efficient the

65
concern is in managing the owner’s fund at disposal. This ratio is of
practical importance to prospective investors & shareholders.

Formula:
Return on proprietors fund = NPAT / Proprietors fund * 100

CREDITORS TURNOVER RATIO:

It is same as debtors turnover ratio. It shows the speed at which

payments are made to the supplier for purchase made from them. It
is a relation between net credit purchase and average creditors.

Formula :

Credit turnover ratio = Net credit purchase / Average creditors

Average age of accounts payable = Months in a year / Credit

turnover ratio

Significance:
Both the ratios indicate promptness in payment of creditor purchases.
Higher creditors turnover ratio or a lower credit period enjoyed
signifies that the creditors are being paid promptly. It enhances credit
worthiness of the company. A very low ratio indicates that the
company is not taking full benefit of the credit period allowed by the
creditors.

66
6.2.4.8 Uses of Ratio analysis

• To evaluate performance, compared to previous years and to

competitors and the industry
• To set benchmarks or standards for performance
• To highlight areas that need to be improved, or areas that offer
the most promising future potential
• To enable external parties, such as investors or lenders, to
assess the creditworthiness and profitability of the firm

6.2.4.9 Advantage of ratio analysis

• Helpful in analysis of financial statements.

• Helpful in comparative study.
• Helpful in locating the weak spots of the business.
• Helpful in forecasting.
• Estimate about the trend of the business.
• Fixation of ideal standards.
• Effective control.
• Study of financial soundness.

67
6.2.4.10 Limitations of Ratio analysis

• There is considerable subjectivity involved, as there is no

“correct” number for the various ratios. Further, it is hard to
reach a definite conclusion when some of the ratios are
favorable and some are unfavorable.
• Ratios may not be strictly comparable for different firms due to
a variety of factors such as different accounting practices or
different fiscal year periods. Furthermore, if a firm is engaged
in diverse product lines, it may be difficult to identify the
industry category to which the firm belongs. Also, just because
a specific ratio is better than the average does not necessarily
mean that the company is doing well; it is quite possible rest of
the industry is doing very poorly.
• Ratios are based on financial statements that reflect the past
and not the future. Unless the ratios are stable, it may be
difficult to make reasonable projections about future trends.
Furthermore, financial statements such as the balance sheet
indicate the picture at “one point” in time, and thus may not be
representative of longer periods.
• Financial statements provide an assessment of the costs and
not value. For example, fixed assets are usually shown on the
balance sheet as the cost of the assets less their accumulated

68
 depreciation, which may not reflect the actual current market
value of those assets.
• Financial statements do not include all items. For example, it is
hard to put a value on human capital (such as management
expertise). And recent accounting scandals have brought light
to the extent of financing that may occur off the balance sheet.
• Accounting standards and practices vary among countries, and
thus hamper meaningful global comparisons.

69
 Chapter 8

Overview

8.1 Profile
70
ICICI Bank is India's second-largest bank with total assets of about
Rs.1,67,659 crore at March 31, 2005 and profit after tax of Rs. 2,005
crore for the year ended March 31, 2005 (Rs. 1,637 crore in fiscal
2004). ICICI Bank has a network of about 560 branches and
extension counters and over 1,900 ATMs. ICICI Bank offers a wide
range of banking products and financial services to corporate and
retail customers through a variety of delivery channels and through
its specialized subsidiaries and affiliates in the areas of investment
banking, life and non-life insurance, venture capital and asset
management.

ICICI Bank set up its international banking group in fiscal 2002 to

cater to the cross border needs of clients and leverage on its
domestic banking strengths to offer products internationally. ICICI
Bank currently has subsidiaries in the United Kingdom and Canada,
branches in Singapore and Bahrain and representative offices in the
United States, China, United Arab Emirates, Bangladesh and South
Africa.

ICICI Bank's equity shares are listed in India on the Stock Exchange,
Mumbai and the National Stock Exchange of India Limited and its
American Depositary Receipts (ADRs) are listed on the New York
Stock Exchange (NYSE).
As required by the stock exchanges, ICICI Bank has formulated a
Code of Business Conduct and Ethics for its directors and
employees.

71
At April 4, 2005, ICICI Bank, with free float market capitalization of
about Rs. 308.00 billion (US$ 7.00 billion) ranked third amongst all
the companies listed on the Indian stock exchanges.

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.

72
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,
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 Ahmedabad 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.

73
8.2 Vision and Mission of ICICI Bank Ltd.

Vision of ICICI Bank:

Mission :

74
We will leverage our people, technology, speed and financial
capital to:
• Be the banker of first choice for our customers by
delivering high quality, world-class products and services.
• Expand the frontiers of our business globally.
• Play a proactive role in the full realization of India’s potential.
• Maintain a healthy financial profile and diversify our
earnings across businesses and geographies.
• Maintain high standards of governance and ethics.
• Contribute positively to the various countries and markets
in which we operate.
• Create value for our stakeholders.

8.3 HISTORY :

75
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, and
would create the optimal legal structure for the ICICI group's
universal banking strategy. The merger would enhance value for

76
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 Citst of Gujarat at Ahmedabad in
March 2002, and by the High Citst 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. ICICI Bank has formulated a Code of Business
Conduct and Ethics for its directors and employees.

As on June 30, 2008 FY’08

CMP: - 955.45 Target Price: - 1,710

77
Incorporation Year 1994
Managing Director K. V. Kamath
Registered Office Landmark, Race Course
Circle, Alakapuri,
Vadodra-390007,
Gujrat
Telephone 91-265-2339923/25/27/28
Fax 91-265-2339926
Website www.icicibank.com
Face Value [Rs] 10
BSE Code 532174
BSE Group A
NSE Code ICICIBANK
Bloomberg ICICIBC IN
Reuters ICBK.BO
ISIN Demat INE090A01013
Market Lot 1
Listing BSE, NSE, NYSE
Financial Year End 03
Book Closure Month Jun/Jul
AGM Month Jul

78
 Table :1 Background Of ICICI

8.4 BOARD MEMBERS

• Mr. N. Vaghul, Chairman

• Mr. Uday M. Chitale
• Mr. Sridar Iyengar
• Mr. Lakshmi N. Mittal
• Mr. Anupam Puri
• Mr. Vinod Rai
• Mr. Somesh R. Sathe
• Mr. M.K. Sharma
79
 • Mr. P.M. Sinha
• Prof. Marti G. Subrahmanyam
• Mr. T.S.Vijayan
• Mr. V. Prem Watsa
• Mr. K.V. Kamath, Managing Director & CEO
• Ms. Lalita D. Gupte, Joint Managing Director
• Ms. Kalpana Morparia, Deputy Managing Director
• Ms. Chanda Kochhar, Executive Director
• Dr. Nachiket Mor, Executive Director

8.5 Why ICICI Bank Leads

ICICI bank envisaged retail banking as a key area of strategic

emphasis for it — with the share of the retail business (both on the
funding and asset sides) growing strongly year after year— the share
of retail business, particularly retail assets.
It appears to be following a business strategy that is quite different
from the high-volume and commodity-style approach of AXIS Bank
and HDFC Bank. That strategy also has its pluses in terms of the
relatively higher margins in some segments of the retail business and
the in-built credit risk diversification (and mitigation) achieved through
80
a widely dispersed retail credit portfolio. ICICI Bank has been able to
maintain the quality of its loan portfolio for a decent time period now.

8.6 SUBSIDIARIES/JOINT VENTURE/ ASSOCIATES

 Domestic Subsidiaries

• ICICI Brokerage Services Limited.

• ICICI Distribution Finance Private Limited.

• ICICI Home Finance Company Limited.

• ICICI Investment Management Company Limited.

81
• ICICI Trusteeship Services Limited.

• Prudential ICICI Trust Limited.

82
Table 2: Subsidiaries
ICICI Venture Funds Management
Company Ltd.
ICICI Primary Dealership Ltd.
ICICI Securities Ltd.
First Source Solutions Ltd.
ICICI Prudential Life Insurance
Company Ltd.
ICICI Lombard General Insurance
Company Ltd.
ICICI Prudential Asset
Management Company
Manages funds that provide
venture capital to start-up
companies and undertake private
equity investments.
Engaged in equity underwriting,
brokerage and primary dealership
in government securities.
Leading Investment Banking
Organization.
Leading third party BPO service
provider.
Retail market share of about 28%
in new business by private sector
life insurance companies during
FY 2007.
Market share of about 34% in
gross written premium among the
private sector general insurance
companies during FY2007.
Among the top two mutual funds
in India in terms of total funds
under management in the Indian
83
Mutual Fund Industry for FY07
with a market share of over 11%.
(Source: AMFI)
 International Subsidiaries

• ICICI Bank Canada.

• ICICI Bank Eurasia Limited Liability Company.

• ICICI International Limited.

• ICICI Securities Holding Inc*.

• ICICI Securities Inc*.

• ICICI Bank UK Limited.

84
8.5 Awards in 2009

ICICI Bank
For the third year in a row ICICI Bank has won The Asset Triple A
Country Awards for Best Domestic Bank in India
ICICI Bank won the Most Admired Knowledge Enterprises (MAKE)
India 2009 Award. ICICI Bank won the first place in "Maximizing
Enterprise Intellectual Capital" category, October 28, 2009
Ms Chanda Kochhar, MD and CEO was awarded with the Indian
Business Women Leadership Award at NDTV Profit Business
Leadership Awards , October 26, 2009.
ICICI Bank received two awards in CNBC Awaaz Consumer Awards;
one for the most preferred auto loan and the other for most preferred
credit Card, on September 30, 2009
Ms. Chanda Kochhar, Managing Director & CEO ranked in the top 20
of the World's 100 Most Powerful Women list compiled by Forbes,
August 2009
Financial Express at its FE India's Best Banks Awards, honoured Mr.
K.V. Kamath, Chairman with the Lifetime Achievement Award , July
25, 2009
ICICI Bank won Asset Triple A Investment Awards for the Best
Derivative House, India. In addition ICICI Bank were Highly

85
commended , Local Currency Structured product, India for 1.5 year
ADR GDR linked Range Accrual Note., July 2009
ICICI bank won in three categories at World finance Banking awards
on June 16, 2009
Best NRI Services bank
Excellence in Private Banking, APAC Region
Excellence in Remittance Business, APAC Region
ICICI Bank Mobile Banking was adjudged "Best Bank Award for
Initiatives in Mobile Payments and Banking" by IDRBT, on May 18,
2009 in Hyderabad.
ICICI Bank's b2 branchfree banking was adjudged "Best E-Banking
Project Implementation Award 2008" by The Asian Banker, on May
11, 2009 at the China World Hotel in Beijing.
ICICI Bank bags the "Best bank in SME financing (Private Sector)" at
the Dun & Bradstreet Banking awards 2009.
ICICI Bank NRI services wins the "Excellence in Business Model
Innovation Award" in the eighth Asian Banker Excellence in Retail
Financial Services Awards Programme.
ICICI Bank's Rural Micro Banking and Agri-Business Group wins
WOW Event & Experiential Marketing Award in two categories -
"Rural Marketing programme of the year" and "Small Budget On
Ground Promotion of the Year". These awards were given for Cattle
Loan 'Kamdhenu Campaign' and "Talkies on the move campaign'
respectively.

86
ICICI Bank's Germany Branch has been certified by "Stiftung
Warrentest". ICICI Bank is ranked 2nd amongst 57 savings products
across 19 banks
ICICI Bank Germany won the yearly banking test of the investor
magazine €uro in the "call money “category.
The ICICI Bank was awarded the runner's up position in Gartner
Business Intelligence and Excellence Award for Asia Pacific for its
Business Intelligence functions.
ICICI Bank's Organisational Excellence Group was recently awarded
ISO 9001:2008 certification by TUV Nord. The scope of certification
comprised processes around consulting and capability building on
methods of quality & improvements.
ICICI Bank has been awarded the following titles under The Asset
Triple A Country Awards for 2009:
• Best Transaction Bank in India
• Best Trade Finance Bank in India
• Best Cash Management Bank in India
• Best Domestic Custodian in India
ICICI Bank has bagged the Best Cash Management Bank in India
award for the second year in a row. The other awards have been
bagged for the third year in a row.
ICICI Bank Canada received the prestigious Canadian Helen Keller
Award at the Canadian Helen Keller Centre's Fifth Annual Luncheon
in Toronto. The award was given to ICICI Bank its long-standing
support to this unique training centre for people who are deaf-blind.

87
 Chapter 9

Data analysis and interpretation

88
9.1.1 Comparative Profit AND Loss a/c

%
Increase
2008 2009 Increase
&
Rs. cr Rs. cr &
Decrease
Decrease
INCOME
Operating
39,467.92 38,250.39 (1,217.53) (3.08)
Income
EXPENSES
Financial
23,484.24 22,725.93 (758.31) (3.23)
Expenses
Personal
2,078.90 1,971.70 (107.20) (5.16)
Expenses
Selling
1,750.60 669.21 (1,081.39) (61.77)
Expenses
Administrative
6,447.32 7,475.63 1,028.31 15.95
Expenses
TOTAL
OPER. 33,761.07 32,842.48 (918.59) (2.72)
EXPENSES
OPERATING
5,706.85 5,407.91 (298.94) (5.24)
PROFIT
Other
Recurring 65.58 330.64 265.06 4.04
Income
89
 ADJUSTED
5,772.43 5,738.55 (33.88) (0.59)
PBDIT
Provisions -509.77 -511.17 (1.40) 0.27
Depreciation 578.35 678.60 100.25 17.33
ADJUSTED
5,703.85 5,571.13 (132.72) (2.33)
PBT
Taxes 1,611.73 1,830.51 218.78 13.57

ADJUSTED
4,092.12 3,740.62 (351.50) (8.59)
PAT

Table 3 : Comparative Profit AND Loss a/c

Interpretation :

90
By analyzing the summarized profit & loss account of ICICI Bank, the
following trends are presented:

• Operating profit decreased to 5.24% for 2008 to 2009

due to recession. which is less than as compared to
increased to Rs. 5,874 crore for 2007 from Rs. 3,888
crore for 2006

• Profit after tax decreased to 8.59 for 2008 to 2009

• Profit before tax decrease by 2.33% in 2009 from 2009.

it’s increased to Rs. 132.72Billion for 2008 from Rs.
36.48 Billion for FY2007 which is also less than as
compared to increased to Rs. 3,648 crore for 2007 from
Rs. 3,097 crore for 2006.

• Provisions and contingencies (excluding provision for

tax) increased to 0.27%.

• Other Recurring Income of ICICI bank increased in 2009

by 4.04% from 2008.

91
9.1.2 COMPARATIVE Balance Sheet

% Increase
2008 2009 Increase &
&
Rs. cr Rs. cr Decrease
Decrease
CAPITAL &
LIABILITIES
Owned Funds
Equity Share
1,112.68 1,113.29 0.61 0.05
Capital
Preferential
350.00 350.00 0.00 0.00
Share Capital
Reserves &
45,357.53 48,419.73 3,062.20 6.75
Surplus
Loan Funds
Deposits 244,431.05 218,347.82 (26,083.23) (10.67)
Borrowings
made by the 65,648.43 67,323.69 1,675.26 2.55
bank
TOTAL 356,899.69 335,554.53 (21,345.16) (5.98)
ASSETS
Cash &
Balances with 29,377.53 17,536.33 (11,841.20) (40.31)
RBI
Money at call
and Short 8,663.60 12,430.23 3,766.63 43.48
Notice
Investments 111,454.34 103,058.31 (8,396.03) (7.53)
Advances 215,060.94 208,090.41 (6,970.53) (3.24)
Fixed Assets

92
 Gross Block 7,036.00 7,443.71 407.71 5.79
Accumulated
2,927.11 3,642.09 714.98 24.43
Depreciation
Net Block 4,108.89 3,801.62 (307.27) (7.48)
Net Current
31,129.77 34,384.06 3,254.29 10.45
Assets
TOTAL 356,899.69 335,554.53 (21,345.16) (5.98)

Table 4 : Comparative Balance Sheet

Interpretation :

By analyzing the balance sheet of ICICI Bank, the following

trends are presented:

93
 • Our total assets asset increased by 10.45% billion at year-end
fiscal 2009 from year-end fiscal 2008.It show that company had
purchase current asset within 2008-09.
• Decrease in cash balance with bank in 2009 is less than
in the previous year 2008.
• But decrease in investment in 2009 is also less than the
previous year.
• Increase in advances in 2008 from Rs 2256.16 Billion to
Rs1958.66 Billion in 2007.

• Erstwhile ICICI borrowings is increasing in years 2009 but rate

of decreasing is less in 2008 i.e. 18% but in 2007 it is 31%.

• Our equity share capital and reserves at year-end fiscal

2009 increased to Rs. 0.05 billion as compared to 2008

• Total deposits increased by 6.0% to Rs. 2,444.31 billion

at year-end fiscal 2008 from Rs. 2,305.10 billion at year-end
fiscal 2007.

9.2.1 Trend Analysis of Profit and Loss with base year 2005

2005 2006 2007 2008 2009

Rs. cr Rs. cr Rs. cr Rs. cr Rs. cr

94
INCOME
Operating
100 147.98 240.39 333.40 323.11
Income
EXPENSES
Financial
100 146.06 248.95 357.40 345.86
Expenses
Personel
100 146.77 219.25 281.92 267.38
Expenses
Selling
100 139.77 289.45 290.94 111.22
Expenses
Administrati
ve 100 218.47 396.27 516.48 598.86
Expenses
TOTAL
OPER. 100 155.57 269.30 368.64 358.61
EXPENSES
OPERATIN
100 122.02 141.56 212.96 201.80
G PROFIT
Other
Recurring 100 103.92 68.94 14.62 73.73
Income

ADJUSTED
100 119.43 131.15 184.53 183.44
PBDIT
Provisions 100 263.72 -4898.84 -5927.56 -5943.84
Depreciatio
100 105.66 92.28 97.97 114.95
n
ADJUSTED
100 122.15 157.33 225.51 220.26
PBT
Taxes 100 106.61 188.55 308.76 350.67
ADJUSTED 100 126.19 149.21 203.86 186.35

95
 PAT

Table 5 : Trend Analysis of Profit and Loss with base year 2005

96
 TrendP/LA/c

400

350

300

250
%

200

150

100

50

0
2005 2006 2007 2008 2009
year

OPERATINGINCOME OPERATINGPROFIT
ADJUSTEDPBDIT ADJUSTEDPBT
ADJUSTEDPAT

Figure 1 Trend of P/L

97
Interpretation :

1) TOTAL INCOME:-

The total income of the company is continuously increased from

100% to 333.40% in the last three years from 2005-06 to 2007-08
because of highly increase in the service revenue. The total income
is less increased because of decrease in the other income from
309.17 to 65.58.

2) EXPENSES:-

The operating expenses of the company is increasing in last 5 years

from 100% to 358.61 % because of the highly increase in the network
operating expenses from 2208.19milion to 10469.53 million,
advertisement and business promotion expense and administrative
expenses. It was comparatively highly increase than the total income
so it inversely affects the profit margin of the company

3) PBDIT:-

The profit before financial charges, amortization expenses and taxes

increases from 100% to 183.44% but it increases less than sales
increases because of highly increase in the operating expenses.

98
4) PBT:-

The PBT of the company was continuously increased in last three

years from 2005-06 to 2007-08 because of the comparatively less
increased in the financial charges and the amortization expenditures.
The profit before tax is increased in the 2007-08 than 2006-07
because of decrease in the financial charges. In 2008-09 decrease
from 225.51 to 220.26

5) PAT:-

The PAT of the company is increasing from 100% to 203.86%till

2008 because of continuously increase in the profit before tax. It
expresses the satisfactory situation for the company and one can say
that company has high ability to operate the business efficiently.
But in 2009 PAT decreases upto 186.35because of increase in
expenses.

9.2.2 Trend Analysis of Balance Sheet with base year 2005

99
 2005 2006 2007 2008 2009
% % % % %
CAPITAL &
LIABILITIES
Owned
Funds
Equity Share
100 120.78 122.07 151.03 125.11
Capital
Preferential
Share 100 100 100 100 100
Capital
Reserves &
100 180.44 198.2 383.96 227.15
Surplus
Loan Funds
Deposits 100 165.38 230.93 244.87 132.27
Borrowings
made by the 100 114.84 152.8 195.71 174.77
bank
TOTAL
FUNDS 100 154.63 209.51 244.01 148.37
AVAILABLE
ASSETS
Cash &
Balances 100 140.81 294.83 463.01 196.28
with RBI
Money at
call and 100 123.09 279.64 131.56 153.35
Short Notice
Investments 100 141.71 180.75 220.76 144.04
Advances 100 160.72 211.95 241.66 145.49
Fixed

100
 Assets
Gross Block 100 108.02 113.99 127.33 124.72
Accumulated
100 133.63 159.66 196.77 183.22
Depreciation
Net Block 100 98.58 97.161 101.75 95.501
Capital
Work-in- 100 153.62 196.95 0 0
progress
Net Current
100 140.72 211.87 280.04 219.81
Assets
TOTAL
FUND 100 154.63 209.51 244.01 148.37
EMPLYED

Table 6: Trend Analysis of Balance Sheet with base year 2005

101
 Capital andLiability
450

400

350

300

250
%

200

150

100

50

0
year
2005 2006 2007 2008 2009

EquityShareCapital PreferentialShareCapital Reserves&Surplus

Deposits Borrowings NetWorth

Figure 2 Trend of Capital & Liability

102
 Assets

500
450
400
350
300
%

250
200
150
100
50
0
2005 2006 2007 2008 2009
Years

Cash&BalanceswithRBI Moneyatcall andShortNotice

Investments Advances
NetBlock NetCurrentAssets
Total FunEmployed

Figure 3 : Trend of Asset

103
INTERPRETATION:-

1) SHARE HOLDER’S FUND:-

The share holders fund of the company increases from 100% to

492.72% in the last five years the share holders’ fund was increased
because the company had issued bonus share. And also issues the
additional shares.

2) LOAN FUNDS:-

The loan fund of the company increases fromv100% to 307.04%

(including secured & unsecured loan) the company has increased in
the secured loan till 2008 but decreased in the 2009.

3)Total fund employed :

The net worth of the company increased from 100% to 244.01% in

2008 because highly increased in the shareholder’s fund. but it’s
become 148.37

104
APPLICATION OF FUND:-

1) FIXED ASSETS

Company’s fixed assets increased from 100% in the year 2004-05 to

101.75% in 2007-08 and it’s become 95.501%

2) INVESTMENT:-

The investment of the company increased from 100% to 220.76% in

2007-08 and 144.04% in 2008-09 because of the company has
invested its capital in stock market, mutual fund & subsidiary
company.

3) CURRENT ASSETS, LOANS & ADVANCES:

The current assets, loans and advances of the company increased

because of highly increased in the cash& bank balance.

4) CURRENT LIABILITIES:-

The current liabilities and provisions of the company decreased

because of decreased in the short term loan and in creditors.

105
9.3 Ratio Analysis

CURRENT RATIO

Formula :

Current Ratio = Current Assets / Current Liabilities

2005 2006 2007 2008 2009

Current
11115.99 15642.79 23551.85 31129.77 343484.06
Assets
Current
21796.06 25230.31 38609.59 43235.79 440364.18
Liabilities
Current
0.51 0.62 0.61 0.72 0.78
Ratio

Table 7: Current Ratio

106
 Current Ratio

0.51
0.78

0.62

0.72
0.61

2005 2006 2007 2008 2009

Figure 4 : Current Ratio

Interpretation :

• The Current Ratio of the Company decreased in 2008-09 from

0.72 to 0.78 because of increase in the loans and advances
from 310079.48 to 285671.51 and increase in sundry Assets
from 31,129.77 to 34,384.06.

• The Current Ratio of the Company decreases in 2007-08 up to

from 0.61 to .072 because of the increase in Cash and Bank
Balance from 18,706.88 to 29,377.53.

107
 • The Committee appointed by the R.B.I recommended a
satisfaction current ratio is 1.33:1 the company’s current ratio is
raising continuously so it is satisfactory.

LIQUID RATIO:

Liquid ratio = Quick Assets / Current Liabilities

2005 2006 2007 2008 2009

Quick 108544.38 167539.26 233201.92 277573.77 2615763.23
Assets
Current
21796.06 25230.31 38609.59 43235.79 440364.18
Liabilities
Liquid 6.64 6.04 6.42 5.94
4.98
ratio

Table 8: Liquid Ratio

108
 QuickRatio

5.94 4.98

6.64
6.42

6.04

2005 2006 2007 2008 2009

Figure 5: Liquid Ratio

Interpretation :

• As the standard ratio the quick ratio of 1:1 is satisfactory.

• The quick ratio of the company is decreasing from 6.42 to 5.94
in 2008-09 because of increase in sundry creditors and
decrease in the loans and advances.
• The quick ratio of the company is decreasing because of
decrease in cash bank balance.
• This situation express the company’s has less quick assets
which are used to meet the quick liability of the current, thus
company may come in trouble for a short period of time.

109
EARNING PER SAHRE

Formula:

Earning per share = NPAT / Number of equity share

2005 2006 2007 2008 2009

NPAT 2,007.28 2,532.95 2,995.00 4,092.12 3,740.62
No. of
Equity 73.67 88.98 89.93 111.27 111.27
share
Earning
per 27.22 28.55 34.59 37.37 33.78
share

Table 9: Earning per share

110
 EPS

33.78 27.22

28.55
37.37

34.59

2005 2006 2007 2008 2009

Figure 6 :Earning per share

INTERPRETATION:-
• This yield can be used by a Share holder while making
decisions about the investment on comparison to other
alternative investments.
• The E.P.S. when compared to the current market price of the
share ,gives measure of the rate of yield .
• The E.P.S. of the company is currently decreasing because of
the decreasing in the net worth during recession.

111
 • The earning per share of the IDEA CELLULAR LIMITED is
continuously increased in the year from 2005-06 to 2006-07
because of highly increased in the net profit.

• Then it was also increased in the year 2007-08 because of the

increased in the net profit and relatively less percentage
increase in the no.of equity share.

• The EPS is continuously increase which express that the

company is effectively uses its capital and also efficiently uses
the loan funds instead of the owner’s fund. It was good for the
share holder’s of the company and they get the satisfactory
return.

Return on capital employed

Return on capital employed = NPAT / Capital employed * 100

2005 2006 2007 2008 2009

NPAT 2,007.28 2,532.95 2,995.00 4,092.12 3,740.62
Capital
736.75 889.83 899.34 1,112.68 1,113.29
employed
Return
on capital 2.72 2.85 3.33 3.68 3.36
employed

Table 10: Return on capital employed

112
 Return on capital emplyed

21% 17%

18%
23%

21%

2005 2006 2007 2008 2009

Figure 7: Return on capital employed
Interpretation:

• This is another ratio to judge the efficiency and effectiveness of

the company like profitability ratio.
• The income from services is greaterly increased compared with
the previous year and the total capital employed includes
113
 capital and reserves & surplus. Due to huge increase in the net
profit the capital employed is also increased along with income
from services. Both are effected in the increment of the ratio of
current year.

Proprietary ratio

Formula :

Proprietary ratio = Proprietary fund / Total fund

2005 2006 2007 2008 2009

Proprietary
12,549.95 22,205.99 24,313.26 46,470.21 49,533.02
fund
Total fund 17,460.89 24,577.16 42,258.73 60,507.30 51,920.39
Proprietary
0.72 0.90 0.58 0.77 0.95
ratio

Table 11: Proprietary ratio

114
 Proprietaryratio

0.95 0.72

0.9
0.77
0.58

2005 2006 2007 2008 2009

Figure 8 :Proprietary ratio

115
Interpretation:

• The proprietary ratio establishes the relationship between

shareholders funds to total assets. It determines the long-term
solvency of the firm. This ratio indicates the extent to which the
assets of the company can be lost without affecting the interest
of the company.
• The share holder’s funds include capital and reserves and
surplus. The reserves and surplus is increased due to the
increase in balance in profit and loss account, which is caused
by the increase of income from services.
• Total assets, includes fixed and current assets. The fixed
assets are reduced because of the depreciation and there are
no major increments in the fixed assets. The current assets are
increased compared with the year 2007. Total assets are also
increased than precious year, which resulted an increase in the
ratio than older.

116
 Chapter 10

Cost Reduction

10.1.1 Introduction :
117
In today’s competitive world Corporate and businesses are
struggling to maintain profits and healthy bottom lines .Cost
of production, fuel, raw material and human resources is rising
each year. These developments have prompted people to look
for Cost reduction Ideas & methods. Those who have opted for
focused cost reduction strategies have survived those who
could not managed have perished. In recent economic down
turn it becomes more important to make cost reduction
program a major initiative in industry .Companies are finding it
difficult to retain people and are laying off people which is
unprecedented in recent history of industrial recession.
Companies have to develop its own cost reduction program for
savings without cutting jobs .
“Cost cutting is no longer the solution to sustainable profitability, the
key to success is finding creative ways to prevent cost.”
Cost reduction program is policy of cutting costs to improve
profitability. It may be implemented when a company is having
financial problems and must "tighten its belt." In some cases, the firm
is initiating a policy to eliminate waste and inefficiency. A cost
reduction program may detract from the quality of earnings when
significant cuts are made in discretionary cost. Cost reduction refers
to the real and permanent reduction in the unit cost of the goods
manufactured or services rendered.

118
10.1.2 DEFINITION

Amount of money used when purchasing a car that is paid up

front in order to get lower monthly lease payments. This can come
from the trade-in value of the previous car, or from a cash down
payment.

“Cost reduction is to be understood as the achievement of real and

permanent reductions in the unit cost of the goods manufactured or
services rendered without impassing their suitability for the use that is
intended”
- ICWA London.

Reduction in the cost of product must be brought about by the

elimination of wasteful and resources employed in its design,
manufacture, sale and distribution. Reduction in quality of a product
or the range of its uses cannot be regarded as fitting cost reduction.
Cost reduction must be an attitude of mind throughout the
organization. it must be organised and controlled by a senior
manager, with a team of skilled people able to analyses and record
business activity and find ways improves the methods used. So that
costs are reduced and output increased.

119
How to reduce cost?

 Elimination of waste

 Improving operations.

 Increasing Productivity.

 Cheaper materials.

 Improved Standards of Quality.

COST REDUCTION CAN BE EFFECTED BY EITHER OF THE

FOLLOWING WAYS:

(i) By reduction in unit cost of production:

This is usually brought by elimination of wasteful and non-
essential elements in the design of products and from
techniques and practices carried out .(Any reduction in costs
due to changes in Government policy like reduction in taxes or
duties or due to price agreements do not come into the area of
cost reduction as these are not real and permanent reductions)

(ii) By increasing productivity:

This refers to increase in the volume of output with the
expenditure remaining the same. But this should not be
achieved at the cost of the characteristics and quality of the
product.

120
10.1.3 Cost control :

Cost control is concerned with keeping the expenditure within

acceptable limits. Its major assumption is that costs are in control
unless costs exceed budget or standard by an excessive amount.

DIFFERENCES BETWEEN COST CONTROL AND COST

REDUCTION

COST CONTROL COST REDUCTION

Controls costs towards Represents real and permanent

achievement of predetermined
decrease in costs.
decrease in costs. target or goals.
It is a routine exercise. It is a planned process.

It is a preventive function. It is a corrective function.

Table 12: Differences between Cost Control & Cost Reduction

121
10.1.4 TECHNIQUES OF COST REDUCTION

1. VALUE ANALYSIS:

Value analysis is the identification of un necessary cost i.e. cost

that neither provides quality, nor use, nor life, nor appearance, nor
customer satisfaction. Thus value analysis attacks costs at
production stage.

2. ECONOMIC BATCH QUANTITY:

(EBQ) EBQ is that point where carrying costs equals set up cost
approximately. At this point the total cost will also be minimum.

3. ECONOMIC ORDER QUANTITY:

(EOQ) EOQ is the quantity fixed at a point where total cost of

ordering and the cost of carrying the inventory will be minimum.

4. ACTIVITY BASED COST MANAGEMENT:

ABC assumes that resource-consuming activities cause costs. Its

aim is to directly control the activities that cause costs, rather than
cost. By managing activities that cause costs, costs will be
managed in the long run. Cost causing activities – designing,
engineering, manufacturing, marketing, etc.

122
 5. JUST-IN-TIME APPROACH:

(JIT) The aims of JIT are to produce the required items, at the
required quality and in the required quantities, at the precise time
they are required.
JIT helps in cost reduction by –
a. elimination of non-value-added activities,
b. zero inventory,
c. zero defects,
d. zero breakdowns,
e. single batch ordering.
Though the above goals are unlikely to be achieved, it represent
targets and create a climate for continuous improvement and
excellence.

6. TOTAL QUALITY MANAGEMENT:

(TQM) TQM works on the philosophy that all business functions

are involved in a process of continuous quality improvement.
TQM reduces cost by producing the products correctly the first
time rather than wasting resources making substandard items and
incurring additional expenditure on inspection, rework and
scrapping. It helps organisations to achieve their quality goals by
providing reports and measures that will improve quality. TQM
aims at a customer-oriented process of continuous improvement

123
that focuses on delivering products or services of consistent high
quality in a timely fashion.

7. SUPPLY CHAIN MANAGEMENT:

(SCM) SCM attempts to build a cost effective chain beginning with

the ultimate customer and links all the previous suppliers under
one platform. An effective SCM eliminates most of the activities in
between customers and raw material suppliers along with
associated costs. Most of the non-core activities are outsourced
and hence fixed costs are kept minimal.
Close interaction between the corporate R&D and the suppliers
facilitates continuous improvements in product design, process
methodologies, etc. resulting in customer value enhancement and
cost reduction. A rupee spent on the supply chain can give more
value than a rupee spent on marketing. The supply chain is part of
the service offering.

8. PERT ANALYSIS:

Program Evaluation Review Technique (PERT) reduces cost by

giving an optimum schedule for the activities necessary to
complete a project.

124
10.1.5 Non-Conventional Approach for cost reduction :

 Material Cost – Cost reductions thru’

o Material cost E-sourcing
• Discovery of new sources
• Competitive pressures
• Rationalisation of suppliers
o Thrust on Value Engineering
• Re-Visiting Designs
• Application oriented engineering
o Product Life Cycle Management

 Manpower Cost
o Right-sizing of Employees – VRS Schemes
o Optimum utilisation of Manpower
• Transition from Machine engagement time to Man-
Engagement time.
o Productivity-linked wage settlements
o Adopting new concepts
• MOST
• CELL Layout

 Cost Management Initiatives

 Selling and Distribution
 Funding Cost
125
10.1.6 Cost Reduction Process

1) Analysis
2) Examination.
3) Developing Solution.
4) Selecting a solution.
5) Obtaining agreement.

9.1.7 Implementing Cost reduction program

 Set realistic goals

 Develop cost reduction program consulting all
 Do an ROI analysis
 Implement the cost reduction program
 Measure actual results with goals
 Continue the process until the set goals are achieved
 Explore all options, not only BPR/technology(consider off
shoring and outsourcing

126
Figure 3 Cost Reduction Program Structure

127
10.1.8 Benefits of cost reduction

Cost

Reduction

Figure 4 Benefit of Cost reduction

128
10.1.9 Fish Bone Diagram for cost reduction program

Figure 5 Fish bone Diagram for Cost Reduction

129
10.1.10 Precautions in Implementations

1) Must be planned soundly .

2) Appropriate to organization.
3) Requires cooperation and coordinated efforts.
4) Reluctance should be recognized and dealt with.
5) Programs should be clearly communicated.
6) Should not have undesirable effects on external parties.
7) Unnecessary costs can be reduced not eliminated.
8) Is expensive and complicated to implement

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10.1.11 Advantages of Cost Reduction

A. To a particular concern
 Improves profits.
 Improves financial position.
 Improves competitive capabilities.
 Serves as an index of efficiency.

B. To the Industry
 One company serves as a trend setter for the other
companies.

C. To the Nation
 Efficient utilization of Scarce Resources .
 High taxes can be levied by the government.
 Retaining the markets and gaining new buyers.
 Combating inflation.

131
10.1.12 A few applications of cost reduction strategies.

1. Freeze in hiring .
2. Personal awareness to cost cutting.
3. No bonuses or pay hikes.
4. Night home drops and pick ups are charged.
5. Reducing off-shore trainings.
6. Outlook comm. Used in Place of Bharti

1. The share ownership plan discount scrapped

2. Reducing work hours for trainees.
3. Delay in fresher joining the company.
4. WFR carried out.
5. Paycut of 5%.
6. Annual shutdown of a week extended to a fortnite

132
1. Shutting down older fabrication units.
2. Freeze in hiring.
3. Reduced travel expenses,using video chats &voice chats as
alternatives.
4. Reducing/reusing inventory.
5. Increasing personal awareness.
6. Avoiding discretionery expenditures.

1. Introduction of new cost effective technology.

2. Process re-aligning.
3. Re-engineering of product.
4. Restructuring of workforce.
5. Rationalizing input costs.

133
10.2 Cost Reduction Program of ICICI Bank Ltd.

With pressures on the spreads and the competition in the urban

markets increasing rapidly, banks need to develop new ways to
sustain profitability & reduce costs. Banks led to a plethora of new
products, hence becoming a one stop shop for all financial solutions.
Moreover, the entries of several other foreign banks in India are
acting as a strong signal to the domestic players to pull up their socks
to face the new competitors.

134
10.2.1 Areas for cost reductions in ICICI Bank Ltd.

Areasofmakingcostreductions

None
7%
Other*
8%

Telecom Personnel,
11% 37%

Facilities
18%

Technologies
19%

Figure 9: Areas for Cost Reduction in ICICI Bank

Not surprisingly, personnel, as the largest expense in the Bank, is

targeted most often for cost reductions. The additional categories
rank fairly closely to the typical makeup of ICICI bank budgets as
well.

*Of those selecting “other,” increasing efficiencies was most often

cited.

10.2.2 Cuts in ICICI Bank Ltd. are as follows :

135
 Series1

Reducingsupervisorheadcount 16%

Usingoutsourcedagents 16%

Reducingsupportservicesheadcount 20%

Usingpart -timeagents 24%

Usingat -homeagents 33%

Reducingtechnologycosts 36%

Reducingagent headcount 42%

Reducingattrition 53%

Figure 10 : Cuts in ICICI Bank

Initially surprising, reducing attrition, tops the list of specific planned

cuts, followed closely by reducing headcount. Half of those reducing
headcount are also reducing attrition. Many people questioned
shared that reducing headcount was often not replacing those lost by
attrition or using part-time or home agents, as opposed to actively
reducing positions. Additionally, only a little more than a third of those
reducing agents are also reducing supervisors.

136
9.2.3 The various Cost Reduction strategies of ICICI bank ltd. are
as follows :

A. Interest on Deposits

B. Bringing down other costs

A. Interest on Deposits

• Increasing CASA %

For a bank with a large network, if each branch can contribute

more low-cost deposits, the bank will become cost-effective as
deposits represent a very stable source of funds – Low
volatility. It is one major weapon with which banks can face the
threat of any competitor in the banking industry. While foreign
banks are not constrained for funds, public & private sector
banks will have to learn to operate with lesser margins in some
transactions, and also improve cost effectiveness. It is virtually
impossible to run an effective retail bank of any size without a
culture of deposit gathering and deposit growth. Hence, the
availability of these low-cost funds reduces the burden of the
bank to acquire funds at a high costs & therefore helps in
reducing banks overall cost.

137
• Short – Term Fixed Deposits

Short term fixed deposits helps bank; maximize their bottom lines
by reducing their costs. For instance, if a client makes a one-week
deposit, and then extends the deposit by another and then another
week, a bank is able to use the capital for three weeks while it only
has to pay a one-week interest rate, which is always much lower a
one-month interest rate. It is also believed that if banks refuse
short-term deposits, they might miss out on idle capital. Moreover
the interest rate for one-week term and less-than-one-month term
deposits is lower than the rates for medium- and long-term
deposits which favor the banks bottom line. However, ‘adjusting
the interest rate curve’ will have the following impact.
• First, interest rates will be put in order: longer-term
deposits will have higher interest rates than shorter-term
deposits.

• Second, the low interest rates for short-term deposits will

encourage clients to make long-term deposits, thus helping
banks reduce capital mobilization costs. If banks can reduce
capital mobilization costs, they will be able to slash lending
interest rates.

138
 • Increasing Float Funds

Increased fund availability provides more opportunities to take

advantage of the float on the electronic deposit. Banks can now
leverage these additional funds by investing in other services or
financial earnings instrument. The challenge posed by banks is to
learn how to invest that money in the optimum area for increased
revenue growth.

B. Bringing down other costs

• Staff Costs

Wages are a major chunk of a banks cost and banks must try
minimizing this by improving productivity per employee of the bank.
Foreign banks touch the peak with 19.71% of their total expenses
incurred towards wages compared to 10.34% in case of ICICI’s in
2007-2008. Wages have a direct impact on the profits of the bank &
a bank can significantly improve their profits by reducing their
expenditure on wages.

139
• Cost on Technology and Utilities

Although most companies abandon their investments in technology

altogether during harsh times, automation can mean lower cost of
human resources, less paper use and faster operations, all resulting
in substantial cost savings. Companies which can find ways to
make better use of their existing IT systems or make minimal
investments with substantial impact can create considerable cost
savings through such efforts. Adoption of Technology can lead to
business transformation and cost advantage in the long term. For
instance, Oracle Financial Services Applications enable financial
institutions to automate processes to reduce finance and accounting
costs, cut IT costs, manage by fact and improve operational
efficiency. With ICICI bank ltd. State Bank of India, UTI Bank and
Development Credit Bank Ltd has successfully implemented Oracle
Financial Services Applications (OFSA) in India.

• Online Banking

Online banking uses modern computer technologies to offer the

users convenient banking facilities. This facility eliminates the need
of a customer to personally visit the bank’s branch for any sort of
transaction. It also eliminates the necessity of doing any paper-

140
 based work and saves considerable time for the bank & the users.
Banks largely benefit from the online banking facilities. Besides
offering their users the convenience of banking, the online banking
system means significant cost savings for the banks. With such an
automatic system in place, banks need not hire employees
specialized in handling paper work and teller interactions. This
reduces the banks’ operating costs considerably, translating into
significant cost savings over the long-term.

• Optimize Cash Management

Cash is, ultimately, the inventory of financial institutes, and as in all

industries, effective management of cost of inventory results in
decreased costs. By optimizing levels of cash in ATM machines and
across branches as well as automating transactions as much as
possible, ICICI banks decrease their cash handling maintenance
costs as well as their opportunity costs.

• Communication Cost

Although traditional mass marketing and advertising activities can

be effective ways for increasing overall awareness and interest,
they are not the most cost effective means for marketing. Tailored
marketing activities targeted at only the relevant audience can
substantially decrease the cost of communications while boosting

141
 response rates. Companies should move more towards targeted
activities in promoting their products and services, cutting down
their marketing budgets while keeping and even improving their
effectiveness. Communications also includes tele-communication
cost which can be significantly reduced by integrating all existing
communications networks into a single integrated network with
voice over IP (VoIP) and eliminate redundant charges. The savings
are realized in four major areas: Cost reduction of new data/voice
circuits Elimination of intercompany long distance Reduction of local
dial tone service at branches Strategic implementation of
enterprise-wide call-routing patterns.

• Stationery & Other Cost

Optimum utilization of stationery can considerably decrease

operating costs. As an example, Citigroup recently posted a cost-
cutting memo, advising that 'staff should print black and white and
on double sided paper'. Similarly memos going out all around the
world, with reminders - to not print documents for reading, to turn off
lights when leaving office etc can result in cost cutting for banks.

• Transaction Cost

Over the years, most banks treated customer channel migration as

a priority, seeking out means to decrease crowd at the branches as
well as to reduce cost of transaction. With the downturn, this has

142
become even more critical…the cost to serve a customer via the
internet pales in comparison to branch service costs. Numerous
methods (i.e. loyalty program incentives, higher interest rates, etc.)
can be used to drive the migration of customers to lower cost
channels. From a pure profitability point of view, not all customers
are equal, and, they should not be treated equally. Retention of high
value and high potential customers are far more critical than
individual mass customers, especially in times of economic
downturn. Companies should focus their limited marketing budgets
on getting, retaining and growing these customers as much as they
can. At the other end of spectrum is the below zero customers, who
have negative impact on the company bottom-line. ICICI bank also
consider ways for selectively 'firing' these customers, unless they
have the potential to grow into profitable customers.
Consider Channel Close Down and Relocations
ICICI Banks should be looking into closure of their unprofitable
channels, ATMs and branches, in order to decrease cost of sales
and services. With decreasing market demand and changing
customer needs, certain branches, ATMs and channels can
become redundant with limited potential, or, expensive to maintain.
Relocation is also an alternative to a close down, which can
significantly decrease cost of rent and maintenance.

143
Chapter 11

Findings

144
This study is carried out with the objective of analyzing the financial
performance
of ICICI Bank to examine and understand the role of finance in the
growth of the company and also to find out the cost reduction
program during recession.

This chapter attempts to highlight the findings of the study.

• The comparative statement shows that the Operating Income

of the year 2008 are very high compared to the past. But in
2009 it’s reduces due to recession.
• The profit before interest and tax is in positive during the period
of study excluding the year 2009 because of low operating
income in the corresponding year.
• The sales, PBIT, PBT, PAT all shows the increasing trend
during the period under review. It depicts that the company is
working with more efficiency.
• The repayment of loan funds which reduces the interest
charges
• The interest and finance charges in the year 2007 are one third
of 2001. It made a favorable impact towards the company.
• Return on Investment fluctuates more due to the charges in the
operating profit of the company.
• Net Profit ratio shows increasing trend. It depicts that the
efficiency is maintained in sales value and operating expenses.
145
• Fixed Assets turnover ratio shows the increasing trend. It
depicts that the company’s fixed assets are utilized properly.
• Working Capital turnover ratio depicts the increasing trend
shows from 2002 to 2004 and then slope downwards due to
holding high cash and bank balance after the year 2005.
• The ideal current ratio is 2 which the firm obtains only after the
year 2005 it shows the positive impact.
• The ideal liquid ratio is 1 which is also obtained by the firm only
after the year 2005, which enables the company to meet the
emergency requirements.
• Proprietary ratio of the company fluctuates during the period of
study. It shows the change in the value of reserves and surplus
in the form of shareholders’ fund.

146
 Chapter 12

SUGGESTIONS

147
SUGGESTIONS

Some of the recommendation and suggestion are as follows:

• The attention is required on the areas of growth,

profitability ,service level and building talent.
• To increase the profit of bank, bank should decrease their
operating expenses and increase their income.
• To increase its liquidity, bank should keep some more
cash in its hand instead of giving more and more advances.
• Introduce quality consciousness and standardization of the
work system and procedures.
• Make manager competitive and introduce spirit of market-
orientation and culture of working for customer satisfaction.
• There is need to build the knowledge and skill base among the
employees in the context of technology.
• Performance measure should not only cover financial
aspects i.e. quantitatively aspects but also the qualitative
aspects.
• It is high time to focus on work than the work-achieved.
• Bank should increase its retail portfolio.
• Bank should manage its all risk such as credit, market
and operational risk properly and should be managed by a
person who are highly skilled and qualified. Bank should pay
attention on its subsidiary “ICICI Prudential Life Insurance
Company Limited”
148
 Chapter 13

CONCLUSION

149
CONCLUSION

The balance-sheet along with the income statement is an

important tools for investors and many other parties who are
interested in it to gain insight into a company and its operation. The
balance sheet is a snapshot at a single point of time of the
company’s accounts- covering its assets, liabilities and shareholder’s
equity. The purpose of the balance-sheet is to give users an
idea of the company’s financial position along with displaying what
the company owns and owes. It is important that all investors
know how to use, analyze and read balance-sheet. P & L account
tells the net profit and net loss of a company and its appropriation. In
the case of ICICI Bank, during fiscal 2008, the bank continued to
grow and diversify its assets base and revenue streams. Bank
maintained its leadership in all main areas such as retail credit,
wholesale business, international operation, insurance, mutual fund,
rural banking etc. Continuous increase in the number of branches,
ATM and electronic channels shows the growth take place in bank.
Trend analysis of profit & loss account and balance sheet shows the
% change in items of p & l a/c and balance sheet i.e. % change in
2009 from 2008 and % change in 2007 from 2006. It shows that
all items are increased mostly but increase in this year is less than
as compared to increase in previous year. In p & l a/c, all items
like interest income, non-interest income, interest expenses,
operating expenses, operating profit, profit before tax and after tax is
150
increased but in mostly cases it is less than from previous year
but in some items like interest income, interest expenses,
provision % increase is more. Similarly in balance sheet some
item is less than previous year and in some items it is more.
Ratio analysis of financial statement shows that bank’s current
ratio is better than the quick ratio and fixed/worth ratio. It means
bank has invested more in current assets than the fixed assets
and liquid assets. Bank have given more advances to its
customer and they have less cash in their hand. Profitability
ratio of bank is lower than as compared to previous year. Return on
equity is better than the return on assets. Therefore analysis shows
that cash inflow is more than the cash outflow in ICICI Bank. Thus,
the ratio analysis and trend analysis shows that ICICI Bank’s
financial position is good. Bank’s profitability is increasing but
not at high rate. Bank’s liquidity position is fair but not good
because bank invest more in current assets than the liquid
assets. As we all know that ICICI Bank is on the first position
among all the private sector bank of India in all areas but it should
pay attention on its profitability and liquidity. Bank’s position is stable.

151
CHAPTER 14

ANNEXURE

152
14.1 Balance sheet of ICICI Bank Ltd.

Balance Sheet
Rs. Cr
Period &
2009/03 2008/03 2007/03 2006/03 2005/03
months
CAPITAL & LIABILITIES
Owned Funds
Equity Share
1,113.29 1,112.68 899.34 889.83 736.75
Capital
Share
Application 0.00 0.00 0.00 0.00 0.02
Money
Preferential
Share 350.00 350.00 350.00 350.00 350.00
Capital
Reserves & 48,419.7
45,357.53 23,413.92 21,316.16 11,813.20
Surplus 3
Loan Funds
218,347. 244,431.0 230,510.1 165,083.1
Deposits 99,818.78
82 5 9 7
Borrowings
67,323.6
made by the 65,648.43 51,256.03 38,521.91 33,544.50
9
bank
335,554. 356,899.6 306,429.4 226,161.0 146,263.2
TOTAL
53 9 8 8 4

ASSETS
153
Cash &
17,536.3
Balances 29,377.53 18,706.88 8,934.37 6,344.90
3
with RBI
Money at call
12,430.2
and Short 8,663.60 18,414.45 8,105.85 6,585.07
3
Notice
103,058. 111,454.3
Investments 91,257.84 71,547.39 50,487.35
31 4
208,090. 215,060.9 188,614.0 143,029.8
Advances 88,991.75
41 4 1 9
Fixed Assets
Gross Block 7,443.71 7,036.00 6,298.56 5,968.57 5,525.65
Accumulated
3,642.09 2,927.11 2,375.14 1,987.85 1,487.61
Depreciation
Less:
Revaluation 0.00 0.00 0.00 0.00 0.00
Reserve
Net Block 3,801.62 4,108.89 3,923.42 3,980.72 4,038.04
Capital
Work-in- 0.00 0.00 189.66 147.94 96.30
progress
Net Current 34,384.0
31,129.77 23,551.85 15,642.79 11,115.99
Assets 6
Miscellaneou
s Expenses
0.00 0.00 0.00 0.00 0.00
not written
off
335,554. 356,899.6 306,429.4 226,161.0 146,263.2
TOTAL
53 9 8 8 4
154
Number of
Equity
shares 111.27 111.27 89.93 88.98 73.67
outstanding
(Cr.)
Bonus
component
0.00 0.00 0.00 0.00 0.00
in Equity
Capital
Notes:
Contingent 840,670. 401,114.9 199,771.4 134,920.9 107,311.4
liabilities 63 1 1 9 6
Book Value
of Unquoted 0.00 0.00 0.00 0.00 0.00
Investments
Market Value
of Quoted 0.00 0.00 0.00 0.00 0.00
Investments

155
7.9 Profit and Loss of ICICI Bank

Profit and Loss

Rs. Cr
Period &
2009/03 2008/03 2007/03 2006/03 2005/03
months
INCOME
Operating 38,250.3 39,467.9 28,457.1 17,517.8 11,838.1
Income 9 2 3 3 0

EXPENSES
Financial 22,725.9 23,484.2 16,358.5
9,597.45 6,570.89
Expenses 3 4 0
Personel 1,971.70 2,078.90 1,616.75 1,082.29 737.41
156
Expenses
Selling
669.21 1,750.60 1,741.63 840.98 601.71
Expenses
Administrativ
7,475.63 6,447.32 4,946.69 2,727.18 1,248.31
e Expenses
Capitalized
0.00 0.00 0.00 0.00 0.00
Expenses

TOTAL OPER. 32,842.4 33,761.0 24,663.5 14,247.9

9,158.31
EXPENSES 8 7 7 0

OPERATING
5,407.91 5,706.85 3,793.56 3,269.94 2,679.78
PROFIT

Other
Recurring 330.64 65.58 309.17 466.02 448.46
Income

ADJUSTED
5,738.55 5,772.43 4,102.73 3,735.96 3,128.25
PBDIT

Provisions -511.17 -509.77 -421.30 22.68 8.60

Depreciation 678.60 578.35 544.78 623.79 590.36
Other Write
0.00 0.00 0.00 0.00 0.00
offs

ADJUSTED
5,571.13 5,703.85 3,979.25 3,089.49 2,529.29
PBT

Taxes 1,830.51 1,611.73 984.25 556.53 522.00

157
ADJUSTED
3,740.62 4,092.12 2,995.00 2,532.95 2,007.28
PAT
Non-recurring
17.51 65.61 115.22 7.12 -2.08
items
Other Non-
cash -0.58 0.00 0.00 0.00 0.00
Adjustments

REPORTED
3,758.13 4,157.73 3,110.22 2,540.07 2,005.20
PAT
APPROPRIATIONS
Equity
1,224.58 1,227.70 901.17 759.33 632.96
Dividned
Preference
0.00 0.00 0.00 0.00 0.00
Dividend
Retained
4,818.07 3,778.63 2,349.39 1,862.46 1,335.22
Earnings

158
 Chapter 15

Bibliography

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R.M.Kishore
• Investment Analysis & Portfolio Management- Prasanna
Chandra

159
 • Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2007).
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• “Finance Management” by Khan& Jain, Fifth Edition, published
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John J. Wild
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News Papers:
• Economic Times
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Magazines:
• Capital Market
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160
Websites:
• www.intra.rathi.com
• www.icicibank.com
• www.rbi.org.in
• www.moneycontrol.com
• www.equitymaster.com
• www.nseindia.com
• www.dynemic.comwww.google.comwww.bseindia.com
• www.indiainfoline.com
• http://www.netmba.com/finance/financial/ratios
• www.icicidirect.com
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161