INTRODUCTION TO THE STUDY

The process of financial analysis is widely used evaluate the past, present and likely future performance of a business organization and identifying and financial strength and weakness of the enterprises by properly establishing relationship between the items of balance sheet and profit and loss account. The financial information contained in the statement is used by managements, creditors, investors and others to form qualitative judgment about the performance and financial position of the enterprise. These statement may be more fruitfully used if they are efficiently analyzed and interpreted to have a better insight about the financial strength and weakness of the enterprises, thus we can say financial statement are prepared primarily for decision making. The statement are not an end in them but are useful in decision making context. The balance sheet may be described as financial cross section taken at certain interval and the earning statements as a condensed history of the growth and decay between cross section. Thus financial analyst is the starting point for making plans, before using any sophisticated forecasting and budgetary procedures, IT is the financial analysts, which helps the management in their overall responsibility to see that the resources of the enterprises are properly utilized. Financial statements are very useful in given various indicators with help of certain techniques properly known as ratio analysis. The techniques are called as analysis and interpretations of financial statements.

The utility of such statement is that a forecast may be made of the prospects of future earning ability to pay interest and debt maturities (both current and long term) and probability of sound dividend policy. Analysis of statement consist data recording to parameter of desired spectrum and presenting them in fashion that the above objective is achieved. The analysis and interpretation bridges the gap between the art of recording and the art of using information, analysis exercise is basically an exercise to find facts from the given set of complex figures and date. According to Jhon. N. Mayer the financial statements provide a summary of the account of a business enterprise. The balance sheet is reflecting the assets, liabilities and capital and as on a certain date and income statements showing the result of operations during a certain period. The American institute of certified public accountants states the nature of financial statements, as Financial statements are prepared for the purpose of presenting a periodical review on progress by the management and deal with the status of investment in the business and the results achieved during the period under the review. The reflect combination of recorded facts, accounting principles and personal judgments. Tools of financial Analysis

A financial analysis can depot the following tools for analysis of the financial statements. These are also termed as methods of financial analysis. The following are the tools:-

1. Comparative financial statements Comparative financial statements are those statements, which have been designed in a way so as to provide time prospective to the consideration of various elements of financial position embodied in such statements. In these statements figures for two or more periods are placed side by side to facilitate comparison. Both the income statement and balance sheet can be prepared in the form of comparative financial statements. 2. Common size Financial Statements Common size financial statement is those in which figures reported are converted into percentage to some common base. In the income statement the sales figures is assumed to be 100 and all figures are expressed as percentage of sales similarly in the balance sheet the total all the figures are expressed as percentage of this total. 3. Trend percentages Trend percentages are immensely helpful in making a comparative study of the financial statements for several years. The method of calculating trend percentages that each item bears to the same item in the base year. Any year may taken as the base year. Each item of the base year is taken as 100 and on the basis the percentages for each year calculated. 4. Fund flow Analysis Fund flow Analysis has become an important tool in the analytical kit of the analysis of the financial institution and financial managers. This is because of the balance sheet of business reveals its financial status at a particular point of time it does not sharply focus those financial

transactions, which have been behind the balance sheet changes. Fund flow analysis reveals the changes in working capital was obtained and the purpose for which it is used. 5. Ratio Analysis Ratio analysis is a powerful tool of financial analysis. The ratio analysis is based on the fact that a single accounting figure by itself may not communicate any meaningful information but when expressed as a relative to some other figure, it may be definitely providing some other figure, it may definitely providing some other significant information

INDUSTRIAL PROFILE INTRODUCTION

Banking system occupies an important place in a nations economy. Bank is an indispensable institution in a modern society and forms the core of the money market of the advanced countries. The Indian money market, however, is characterized by the existence of both the unorganized and the organized credit agencies which meet the credit needs of the various sectors of the economy. The money lenders and indigenous bankers constitute the unorganized money market. The organized sector of the money market consists of the Reserve Bank, Commercial banks and Co- operative banks. The Co- operative banks have penetrated in to the rural areas and possess a three-tire federal character a state Co- operative bank at the apex (state) level, a central Co- Operative bank at the district level and primary Co- operative society at the village level,. The RBI, as the central bank of the country, performs among others, the functions of supervision, regulation and development of others constituent of the money market.

CO-OPERATIVES IN INDIA In 1904, the co-operative movement was started in this country largely with a view to provide agriculturists with finance at low rates of interests. These co-operative society was expected to replace the money-lenders and provide loans to the farmers for productive purposes. Till independence the whole movement was under the influence and control of the government. It was highly bureaucratized. Its only aim was to implement Governmental policies and officers to the movement received instructions from the government. During this period movement was free from politics. For this two reasons were responsible. Firstly at that time political leaders were agitation and the leaders of the movement did not like to associate themselves with the movement to avoid the annoyance of the government. Secondly political leaders themselves felt that the whole movement was so week that no useful purpose will be served by controlling it. But situation has taken a different turn since independence. Since the very beginning of Indias freedom stress has been laid on encouragement to co-operative movement. This has made it very string political leaders belonging to all political parties try to have their maximum control over the societies. CO-OPERATIVE BANKS The co-operative bank movement was officially launched in India in 1904 after the famous prescription of Nicholson to find Raiffeisen. It represents a three- tire structure.
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Primary Agricultural Credit Societies (PACSs) forming the ground flour, the Central CoOperative Banks (CCBS) the middle level and the State Co-Operative Banks (SCBs) the top lour as apex institutions. Whereas the primary societies deal directly with individuals, the central banks deal with primaries, are in turn dealt by the state co-operative banks. To begin with the, primary credit societies were established with unlimited liability, but now limited liability is the accepted principle as it is with central and state Co-Operative banks and land development banks. Co-operative banks mobilize the saving of the members and non-members by including the habit of thrift and self help and lend the fund so raised to those who can profit by them. These two broad functions coupled with a few others make them look like commercial banks.

OBJECTIVE OF THE STUDY The main objective of the studies were: Primary objective: 1. To study the financial performance of the bank. Second objectives: 1. To study the liquidity position of the bank 2. To study the profitability position of the bank 3. To make comparative study for the past five years 4. To study the operational efficiency of then bank 5. To study the solvency position of the bank LIMITATION OF THE STUDY Researcher has faced the following limitations in the present study. 1. The study is purely based on the financial statement 2. Figures are historical in nature 3. The availability of information is limited due to time factor 4. The study is limited to the three years period. Any conclusion arrived at are purely based on this period of time are need not necessarily represent the whole life span of the bank. 5. Non availability of information that is confidential to the management 6. Financial analysis is based upon monetary factors are ignored

RESEARCH METHODOLOGY
Research methodology is a specific and systematic search for pertinent information on a specific topic. Research is an art of scientific investigation according to Clifford Woody Research comprises defining and redefining problems, formulating and evaluating data, at last careful testing the conclusion to determine whether they fit the formulated hypothesis. Research methodology is the systematic way to solve problems. IT is the description, explanation and justification of various methods of conducting research. Research Design A research design is an arrangement of condition for collection and analysis of data in manner that aims to combine relevance to the research purpose with economy in procedure. The research design adapted for the study is analytical in nature. Analytical Research In analytical research the researcher has to use the facts and information already available and analyze the critical evaluation of the material. Research Problems To analyze the financial performance of a bank. Period of study The study cover a period of five years as the bank prepares the financial statement quarterly basis.

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Data Collection The analysis of financial condition and performance necessitate accurate and reliable data. Therefore the data for present day is collected with the help of primary and secondary sources. Primary Data The primary data is collected with the help of personal discussion. Secondary Data Secondary data is mainly used for the study. It is taken from the published sources of the bank is financial statement. Tool Used Ratio analysis Comparative Balance Sheet

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COMPANY PROFILE
Karassery Service Co-operative Bank is primary agricultural service co-operative bank with its area of operation confined to Karassery Panchayath and loan lending area extended to the whole area of Kozhikode Taluk. It was started on 10/10/1994, the bank has emerged a commanding position as it was classification as Class 1 Special Grade Bank, being the highest classification in this group in Kerala State. Also it is noted that the bank is running in profit since its inception and retaining the colorful status of A grade in Audit classification. The head office of the bank is at Mukkam and its address is Karassery Service Cooperative Bank Ltd No D.2628, P.O Mukkam Kozhikode, Pin 673602. The affairs of the Bank is governed by an Elected Board of Directors consisting of 11 members and the tenure is limited for a period of 5 years from the date of assumption of charge. One among the Directors is elected as president of the bank and monitors the day to day affairs of the bank with the help and cooperation of all other Directors by utilizing the service of the entire dedicated and trained personnels. The overall supervision of discharged of duties of the staff of the bank vests with the Secretary / Chief Executive of the Bank. The working hours of the Bank starts from 8.30 AM. and ends at 7PM. In our District, we are the First bank in Co-Operative Sector. Fully computerized in all aspects. The computerization in the year 2000 brought about wholesome change in profile of the bank by increasing the business by leaps and bonds. The bank now has a customer base of more than 45000 persons. Due to systematic working, quick disposal of customers giving no room for any complaint and emphasizing the need of customer relationship as a vital goal. Bank proud to declare that our bank is the first Bank in Co-operative Sector to secure such an award in Kerala State. Another novel idea of installation A.T.M was also implemented by us during 2006 and they are one of the toppers in our state to extend such a valuable service to the customers of the bank.

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Present Working
Karassery Service Co-operative Bank is organized for the members and their families by providing them required loan for promoting agriculture and other trade/business activities in the service area of the bank, with the help of mobilizing deposits from the members of the bank. They are also issuing agriculture loans to members by obtaining cash credit loan from the Financing Banks. At present we are having 23200 members on roll in four classes as classified in the bylaws of the bank. The total paid up share capital of the bank at present is Rs 0.41 crores and deposits is rs 122 crores. They are providing Agricultural loans, Non agricultural loans, Gold loans, Self employment loans Small business loans to our members according their requirement with in the limit provided in the bylaws of the bank and the total amount of the loan outstanding as on date is Rs 119.68 crores. The working capital of the bank as on date is Rs 146 crores. It is conspicuous to note that only a very negligible amount is classified as overdue, the percentage is only 3.01% During the year 2010-11 the total loan issued was Rs 212 crores. An average amount of Fifteen Crores of Rupees is essential to meet the actual demands of members every month, and balance. They are forced to reschedule our plan of raising funds from available sources.

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Board of Directors

NK Abdurahiman Paithal Haji Assain M.P Khasim N.P Thomas U Alex Naduvath Alavikutty Abdul nazar P.P Dandan Patterchola Reena Prakash

President Vice President Director Director Director Director Director Director Director (SC/ST) Director (Women)

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MEMBERSHIP Only the persons above the age of the 18 years who were competent to enter in to contract are eligible for admission as members. There are four classes of shares. A Class shares and their Rights A class membership is issued to an individual who is resident with in or its in the occupation of land in the area of operation other bank, who attain the age of 18 years and not of unsound mind. Only A class members are entitled with the right to elect the board of management. B Class shares and their Rights This members is issued to nominal or associated members. They have no right to elect the managing committee. Minors can take this type shares from the bank along with their parents but they no voting right, no right to take loan and advance from bank. B Class members other than minors have the right to stand as surely and to take loan on pledge of gold from bank. C Class shares and their Rights This type of shares to Government state Co-operative Banks, District Cooperative Banks and other Co-operative Institutions. They do jnot have to pay any entrance fees.

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 D Class shares and their Rights This type of shares are allotted to SSI, small traders having license from Panchayath, permanent government staff, semi government staff, co-operative local self bodies and individuals other than A class members. They have right to take mortgage loan on landed property on the area of operation of bank and have no other rights.

RESOURSES OF THE BANK Share capital Loan from government, KDC and other institutions Deposits from members and non-members Subscription fees Donation Borrowed fund Reserves and other funds Undistributed portion of profits

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