1 FINANCIAL STATEMENT ANALYSIS w The Balance Sheet enables a banker to assess the financial position of a company / unit and assists him in forming a judgment about the financial strength and weakness of the entity as on particular date. w The Profit & Loss A/c indicates the working results of the company during a specified period of time, which is usually one year. w Assets:- Asset should satisfy three attributes for accounting 1) Capability to generate an economic benefit 2) Ownership and 3) Measurement of cost

2 FIXED ASSETS Fixed assets are productive assets.e.g. land, building, plant & machinery fixtures & fittings, vehicles etc. An analyst should look in to the intrinsic worth of the assets rather than the rupee value Depreciation is referred amortization of cost of fixed assets as a notional wear and tear basis of the asset. Two methods of depreciation are in use in India In Straight-line method, a fixed amount is written off every year. In Written-down value method, depreciation is provided at a fixed percentage of the outstanding net block each year

3 CURRENT LIABILITIES 1.Short –term borrowings from banks ( including bills purchased and discounted and the excess borrowings placed on repayment basis) i. From applicant bank ii.From other banks Sub- total (A) 2.Short term borrowings from others 3.Deposits (maturing within one year) 4.Sundry Creditors (trade) 5.Unsecured loans 6.Advances /progress payments from customers / deposits from dealers, selling agents etc.

4 CURRENT LIABILITIES Contd… 7.Interest and other charges accrued but not due for payment 8.Provision for taxation 9.Other statutory liabilities( due within one year) 10.Installments of term loans / deferred payment / credits / debentures /redeemable preference shares (due within one year) 11.Other current liabilities and provisions (due within one year (major items to be specified individually) 12. Current Liabilities SUB-TOTAL (B)(Total of items 2 to 11 ) 13.TOTAL CURRENT LIABILITIES (TOTAL OF ITEM A+B)

5 TERM LIABILITIES 14.Debentures ( not maturing within one year) 15.Redeemable preference shares ( not maturing within one year, but of maturity not exceeding 12 years) 16.Term loans (exclusive of installments payable within one year) 17.Deferred payment credits ( exclusive of installments payable within one year) 18.Term Deposits( repayable after one year) 19.Other term liabilities 20.Total Term Liabilities (Total of items 14 to 19) 21.Total Outside Liabilities (Total of Item 13 + item 20 )

6 NET WORTH 22.Ordinary Share Capital 23.Preference share capital (maturing after 12 years) 24.General reserves 25.Development rebate reserve 26Other reserve( excluding provisions) 27.Surplus(+) or deficit (-) in profit and loss account 28.Net worth (Total of items 22 to 27 ) 29.Total Liabilities ( Item 21 + item 28 )

7 CURRENT ASSETS 30Cash and bank balances 31.Investments (other than long term investments e.g. Sinking Funds, Gratuity Fund. Etc.) i.Government and other Trust Securities ii. Fixed deposits with banks. 32.i. Receivables other than deferred and export receivables ( including bills purchased and discounted by banks) ii.Export receivables including bills purchased and discounted for by bankers) 33.Installments of deferred receivables ( due within one year)

8 CURRENT ASSETS Contd… 34.Inventory: (i) Raw materials ( including store and other items used in the process of manufacture) (a) Imported (b)Indigenous (ii)Stock-in-process (iii)Finished goods (iv)Other consumable spares 35.Advances to suppliers of raw material and stores / spares consumable 36.Advance payment of taxes 37.Other current assets ( major item to be specified individually 38.Total Current Assets ( Total of items 30 to 37 )

9 FIXED ASSETS 39.Gross block ( land and buildings, machinery, construction-in-progress etc.) 40.Depreciation on date 41.Net Block ( item 39 minus item 40 )

10 OTHER NON-CURRENT ASSETS 42.Investment / book debts/ advances / deposits, which are not current assets (i) (a) Investments in subsidiary companies (b) Others (ii) Advances to suppliers of capital goods / spares and contractors for capital expenditure (iii) Deferred receivables ( other than those maturing within one year) (iv) Others 43.Non – consumable stores and spares 44.Other miscellaneous assets including dues from directors 45.Total other Non- Current Assets (Total of items 42 to 44)

11 OTHER NON-CURRENT ASSETS Contd… 46.Intangible Assets ( patents, good will, preliminary and formation expenses, bad / doubtful debts not provided for etc.) 48.Total Assets ( Total of items 38,41,45 and 46 ) 49.Tangible Net Worth ( item 28 minus 46 ) 50.Net Working Capital ( item 38 minus item 13 )