Wednesday, August 1, 2018

FIN619 Project Proposal Sample 2023

Project Proposal on Banking Ratio Analysis

United bank, National bank of Pakistan and Bank Alfalah for the year 2020, 2021 and 2022

1 Chapter No 1: Introduction

1.1 Introduction of the Project:

“Understanding the financial ratios is key point in the success of any business. Capital is backbone of any business and every businessman wants to use his capital in such a way that he has to spend little and get high productivity by using his capital. Businessman always wants to reduce their costs and earns high profit which need a total planning and structure so that he can get desired results. And financial ratios are toll to check all these. Financial ratios help the business to analyze the fluctuation in financial conditions and to check how the business is going over the time. These ratios help to understand the strength and weakness of business. There are hundreds financial ratios which are used by using business, whether they are service oriented or industry. Banking companies in Pakistan are most profit making organizations of which are working since last many decades. Many researchers have been completed research on financial statement analysis of banking companies but there is always a place of improvement in every field of life. Financial statement analysis is key of calculation of financial data. It provides opportunity to predict about the growth of organization and to make improvement in all the sectors and to make future plans.

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

“This project will cover three most important banking organizations in Pakistan which are working on national level and will predict about their financial conditions in last three years. The banking companies which I have selected are NBP, United bank and Bank Alfalah. This project will make analysis on their financial position, on structure of companies, about their objectives and goals and financing decisions. It will compare three years profitability of these companies. The important point of this project is to compare the profitability, liquidity and performance and financial condition of all these three companies with each other and other all banking industries as these are leading banking companies of Pakistan. The research shall explain the financial analysis of financial ratios and analysis with comparison of all companies’ financial statements which incorporated horizontal & vertical rations and trend ratios etc. and it also will include common size analysis, review of descriptive material and comparisons of results with other types of data.

1.2 Financial period under consideration for analysis (2020, 2021, 2022).

1.3 Introduction to banks

United Bank

“United bank is a Karachi based commercial bank. As one of Pakistan’s largest banks in the private sector, the Bank operates a network of over 1,385 branches across Pakistan and 19 branches overseas. With a customer base of over 4 million, it leads the banking and financial services sector in Pakistan. Customers across the world have 24/7 access to the bank via UBL's internet banking facilities”.

National bank of Pakistan

“National Bank of Pakistan (NBP) is a major Pakistani commercial bank with headquarters in Karachi. Although state-owned, it operates as commercial bank, while still continuing to act as trustee of public funds and as the agent to the State Bank of Pakistan in places where SBP does not have a presence, as SBP is the major shareholder of NBP”.

Bank Alfalah

Bank Alfalah Limited is a private bank in Pakistan owned by the Abu Dhabi Group. Bank Alfalah was incorporated on June 21, 1997 as a public limited company under the Companies Ordinance 1984. Its banking operations commenced from November 1, 1997. The bank is engaged in commercial banking and related services as defined in the Banking company’s ordinance, 1962

1.1 Objectives of the study

1 To analyze the selected banks’ efficiency in managing their resources for generating profit

2 To analyze the composition of capital structure of the selected banks, how much of the bank’s assets are financed through external and internal debt.

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

4 To compare the selected bank interest income with their interest expenses.

5 Are banks able to pay the current liabilities from their cash equivalents?

1.1 Significance of the project

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

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

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

1 Chapter No. 2 PROJECT PROCEEDING

Prefatory Parts

Section-I

Chapter-1) Introduction to the project

1.1 Financial Period Consideration for analysis

1.2 Objectives.

1.3 Significance

Chapter-2) Methodology

2.1 Data Collection Sources

• Primary Data

• Secondary Data

2.2 Data Processing and Analysis Tools

Chapter-3) Data Analysis

3.1 Ratios Analysis

1) Net Profit Margin

2) Operating cash flow ratio

3) Gross spread ratio

4) Non-Interest Income to Total Income Ratio

5)Spread Ratio

6)Advances / Deposits Ratio

7)Returns On Equity( ROE)Ratio

8)Debt Ratio

9)Debt / Equity Ratio

10)Trend Analysis

11)Formula and complete working

12)Graphical representation and trend analysis

13)Interpretation & Comparison

Chapter-4) Conclusions and Recommendations’

4.1 Conclusions

4.2 Recommendations’

1 Chapter No. 3 METHODOLOGY

1.1 Data Collection Sources:-

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

1.2 Data Processing Tools:-

For data processing the tabulations, financial calculations, and charts the software package of MS Office 2010&MS Excel 2010 in which word will be used to write the reports and excel will be used to present, analyze and processing the data of financial statements for different calculation.

Section II