A STUDY ON

FINANCIAL RATIO OF NEPAL INVESTMENT BANK

LIMITED

A Project Work Report

SUBMITTED BY:

Sanjeeta Maharjan

TU Regd No: 7-2-478-188-2014

Symbol No.4780049

Brilliant Multiple Campus

SUBMITTED TO:

The Faculty of Management

Tribhuvan University

Kathmandu

In Partial Fulfillment of the Requirement for Degree of BACHELORS IN

BUSINESS STUDIES (B.B.S)

KATHMANDU, NEPAL

April

2017
 DECLARATION

I hereby declare that the project work entitled “A STUDY ON FINANCIAL RATIO
OF NEPAL INVESTMENT BANK LIMITED” submitted to the Faculty of
Management, Tribhuvan University, is an original piece of work under the class
Teacher of Mr. Nirmal Pandey, faculty members of Brilliant Multiple Campus, and is
submitted in partial fulfillment of requirements for the award of the degree of
Bachelor of Business Studies (BBS). This project work report has not been submitted
to any other university or institution for the award of any degree or diploma.

……………………

Sanjeeta Maharjan

Brilliant Multiple Campus

 SUPERVISOR’S RECOMMENDATION

The project work report entitled “A STUDY ON FINANCIAL RATIO OF NEPAL

INVESTMENT BANK LIMITED” of project work report submitted by Sanjeeta
Maharjan, of Brilliant Multiple Campus, is prepared under my supervision as per the
procedure and format requirements laid by the faculty of Management, Tribhuvan
University, as partial fulfillment of the requirements for the award of the degree of
Bachelor of Business Studies (BBS). I, therefore, recommend the project work report
for evaluation.

………………………….

Mr. Laxman Pudasaini

supervisor

Brilliant Multiple Campus

 ENDORSEMENT

We hereby endorse the project work report entitled “A STUDY ON FINANCIAL

PERFORMANCE OF NEPAL INVESTMENT BANK LIMITED” submitted by
Sanjeeta Maharjan, of Brilliant Multiple Campus, in partial fulfillment of the
requirements for award of the Bachelor of Business studies (BBS) for external
evaluation.

Signature: Signature
Chairman Principal

Chandra Singh Saud Durga Prasad Nepal

Management Research Committee Brilliant Multiple Campus

Date: ………………………. Date:…………………….

 ABSTRACT

In this study, an attempt has been made to examine the Financial Ratios of Nepal
Investment Bank Limited. The financial performance is evaluated on the basis of
liquidity, leverage, profitability and turnover. Quantitative approach and descriptive
research design has been used for the study. Secondary and quantitative data are the
main sources of my study. Different types of ratios have been explained by using
tables, figures and their explanation. The study intends to present a brief and clear
picture of ratio and its utilization. This study is based on five financial years from
2012/13 to 2016/17.
 ACKNOWLEDGEMENT

This report is my assignment as a partial fulfillment of project work course for the
requirement of Bachelors of Business Studies program. I have great pleasure in
presenting my report on “A Study on Financial Ratio of Nepal Investment Bank
Limited”. I would like to thank to respect Mr. Laxman Pudasaini, who encourages me
to complete this report. And I would also like to thank the entire staff members for
their kind co-operation thorough guidance and providing valuable information
required for the completion of the report.

This study has been completed under the intensive and genuine guidance of Mr.
Laxman Pudasaini, supervisor of Brilliant Multiple campus, and Tribhuvan University
for her tremendous help, valuable guidance, support and encouraging advices.

This project work would never have been completed, if I had not been unable to
acquire invaluable recommendations from their guidance and incredible help and
suggestions from my seniors and my close friends. I would like to express hearty
thanks towards all the members of my family who provided regular inspiration and
continuous contribution for my success.

Sanjeeta Maharjan

BBS-IV Year

Brilliant Multiple Campus

Sifal, Kathmandu
 TABLE OF CONTENT

DECLARATION...........................................................................................................ii

SUPERVISOR’S RECOMMENDATION...................................................................iii

ENDORSEMENT.........................................................................................................iv

ABSTRACT...................................................................................................................v

ACKNOWLEDGEMENT............................................................................................vi

TABLE OF CONTENT...............................................................................................vii

ABBREVIATIONS......................................................................................................ix

CHAPTER I - INTRODUCTION..................................................................................1

1.1 Background........................................................................................................1

1.2 Statement of the Problem...................................................................................2

1.3 Objectives of the Study......................................................................................3

1.4 Rationale............................................................................................................3

1.5 REVIEW OF LITERATURE..............................................................................4

1.5.1 CONCEPTUAL FRAMEWORK...........................................................4

1.5.2 REVIEW OF RELATED STUDIES....................................................10

1.5.3 RESEARCH GAP.................................................................................12

1.6 RESEARCH METHODOLOGY.......................................................................12

1.6.1 RESEARCH DESIGN............................................................................12

1.6.2 POPULATION AND SAMPLE...........................................................13

1.6.3 SOURCES OF DATA...........................................................................13

1.6.4 DATA COLLECTION AND PROCESSING PROCEDURE..............13

 1.6.5 DATA ANALYSIS TOOLS AND TECHNIQUE...............................14

1.7 Limitation of the study.......................................................................................18

CHAPTER – II RESULTS AND FINDINGS.............................................................19

2.1 Financial Tools.................................................................................................19

2.1.1 Liquidity Ratios.....................................................................................19

2.1.2 Leverage/ Solvency Ratios......................................................................21

2.1.3 Profitability Ratios................................................................................23

2.1.4 Turnover Ratio......................................................................................25

2.1.5 Other indicators.....................................................................................27

2.2 Statistical tools.................................................................................................28

4.3 Major Findings.................................................................................................30

CHAPTER- III DISCUSSION, CONCLUSION AND IMPLICATIONS..................32

3.1 Discussion........................................................................................................32

5.2 Conclusion:......................................................................................................33

5.3 Implications......................................................................................................34

Bibliography.................................................................................................................37
 ABBREVIATIONS

ATM :Automated Teller Machine

B.S : Bikram Sambat

BBS : Bachelor of Business Studies

BVPS : Book Value per Share

C&B/CL : Cash and bank balance to current liability

C.V. : Coefficient of Variation

EPS : Earning per Shares

i.e. : That is

LATD : Loan and Advance to Deposits Ratio

MPS : Market Value per Share

LTD : Limited

NIBL : Nepal Investment Bank Limited

NPM : Net Profit Margin

NRB : Nepal Ratra Bank

NRs : Nepalese rupee

ROA : Return on Assets

ROE : Return on Equity

S.D. : Standard Deviation

TU :Tribhuwan University
 CHAPTER I -

INTRODUCTION

1.1 BACKGROUND

Nepal is a developing country in the world. Most of the people are under the
line of poverty. Banking sector plays the significant role in the development of the
economy of the country. The main function of the banking sector is to collect the
deposits as much as possible from the customers and mobilize them into the most
preferable and profitable sectors such as industries, agriculture, entertainment,
commerce etc. All the activities of the financial sectors are supervised, guided and
controlled by central bank (in the case of Nepal NRB).So a bank is a financial
institution which is licensed by the government and the collects the money from the
savers in the form of deposits and transforms the collected money in investment
through lending activities. Banks provide the financial services the customers under
the rules and the guidance of the central bank. According to Oxford Dictionary-“an
organization that provides various financial services.” According to Wikipedia-“A
bank is a financial institution that accepts deposits from the public and creates credit.”

Financial performance of a bank is concerned with how well a bank is managed. The
financial performance of a bank is all about the current position, profitability, and the
strength and weakness of the bank. Ratio Analysis, funds flow analysis and it is to
find out assessment of the firms past present and future financial performance and
conditions of the bank and also its strength and weaknesses. The analysis of the
performance deals with how well the financial plans and polices are implemented and
how the objectives are met efficiently and effectively.

Thus, banking system occupies an important role in the economic development of a

country. A banking institution is indispensable in a modern society. It plays a pivotal
role in the economic development of a country. Bank is a financial institution which
involves in the financial activities under the rules and the regulations of the central
bank.

1.2 STATEMENT OF THE PROBLEM

Since many financial institutions have been operating the financial activities, there
is intense competition in the banking sector. The main goal of the bank is to maximize
the wealth of shareholders by collecting the deposits and mobilizing them in the
profitable sectors. So to meet the goal, the bank should perform its activities
effectively and efficiently in the market. The analysis of financial performance of the
banks would be highly beneficial for pointing out their strength and weakness. In the
current competitive environment of the commercial banking sector, is the bank
efficient to beat the competition? Is it able to maintain the competitive position? Is it
able to earn satisfactory return? These questions emerge in banking sector. If the bank
is not able to collect the sufficient deposits and fails to channelize them in the
profitable sector, the bank is not only able to earn the return but also it creates the
threat to the survival of the bank. In the current time, banking sector in the most
profitable sector in commerce. In spite of rapid growth, some indicators show
performance is not much encouraging towards the service coverage. In such a
situation the study tries to analyze the present performance of banks, which would
give the answers of following queries.

Ø What are the liquidity, profitability, activity and leverage ratio of NIB?
Ø Are the trends of different ratios of NIB satisfactory?
 12

1.3 OBJECTIVES OF THE STUDY

The main objectives of my study are to analysis and identify Nepal Investment
bank’s financial position so that Nepal Investment bank’s investors and creditors can
easily be known about Nepal Investment bank.

The objectives of the project work are as follows: -

Ø To identify the competitive position of the bank.

Ø To determine the financial performance of the bank by using the financial and
statistical tools.
Ø To analyze the financial position of Nepal investment bank.
Ø To provide the recommendation for improvement on the basis of findings.

1.4 RATIONALE

This research only focuses on financial performance of a commercial bank (Nepal

Investment Bank). It gives the depth knowledge of financial performance and the
financial position of the bank. This study will help the bank to improve the financial
performance of the bank by finding the strength and weakness.

Ø The primary significance of the study to me is that I will be able for the partial
fulfillment of the requirement for the degree of BBS.
Ø This study will help the stakeholders (shareholders, creditors, investors, general
public etc) to know the financial performance of the bank.
Ø This study will help the bank administration to adapt and make the dynamic
strategies to minimize the risks and to achieve its vision of being lading one.
Ø Individuals who are eager to know about this bank can get the brief information
from this study.
 13

1.5 REVIEW OF LITERATURE

Review of literature comprises upon the existing literature and research related to the
present study with a view to find out what had already been studied. According to Wolf
& Pant “The purpose of the reviewing the literature is to develop some expertise in one’s
area, to see what new contribution can be made and to review some idea for Developing
research design”. (Pant and Wolf; 1996:31-44). In the word of Walliman,-“A literature
review is a summery and analysis of current knowledge about a particular topic or areas
of enquiry.” Various books, journals, newspapers, articles, abstract, internet and websites
etc have been studied to complete this research work.

This portion has been divided into two parts: -

1. Conceptual Framework
2. Review of Related Studies

1.5.1 CONCEPTUAL FRAMEWORK

Historical background of bank:

The word ‘bank’ was first derived from the Italian word “Banco” which means a bench.
That word came when the early bankers, the Jews in Lombardy, transacted their business
at benches in the market place. Such different names were given during 600 B.C like it
used to be called “Back in Germany,” “Banked” in French. Later on, the word “Bank”
was derived in England.

Present banking is the result of development of banks many centuries ago. But, the
question arises how was banking system developed and by whom? Actually, the
ancestors of banking system were mainly found to be the business oriented people like
the goldsmiths, moneylenders and businessmen. In the ancient time, they used to perform
the monetary transactions with the people in terms of gold, silver coins and other
deposits. Different receipts and paper notes were used to indicate proof of monetary deal
 14

with each other. Barter system was also common during those days. So, there were no
fixed organization to do the transaction processed but the individuals like tradesperson,
moneylenders and goldsmith. They were the only source of money for people working as
today’s modern “bank” .So; these were just the primitive stage and the beginning of
banking system. However, modern banking started when "The bank of Venice in 1157"
was established. It was the first public bank. Subsequently, Bank of Barcelona and Bank
of Geneva were established in 1401A.D and 1407 .A.D. respectively. In 1693 .A.D., the
Bank of England became the first Central Bank in the world. Later, in 1844 .A.D, the
introduction of banking act 1833 in UK accelerated the growth of banks as it allowed
opening joint stock company banks.

The term “bank” is familiar to almost all types of people of the world. Normally, people
take a bank as a place for money and credit, an institution involved in monetary
transaction. Broadly, a bank is a legal organization, which is established by law to deal
with public money and credit. A modern bank refers to the financial service provider
where money exchange, acceptance of deposit, transfer of money and credit, collection of
cheques etc. takes place. So, it can be termed as “A financial supermarket”.

According to Kent, “A bank is an organization whose principle operations are concerned

with the accumulation of the purpose of advancing to other for expenditure.”

According to Halsbury’s Laws of England,” A banker is defined as an individual

partnership or corporation, who’s sole or predominating business is banking i.e. the
receipt of money on current or deposit account and the payment of cheques paid it by a
customer.

So, there are various forms of definitions for a bank as per different individuals and acts.
But, all these views conclude that a bank is place for collection and source of money or
credit to the people.

History of banking in Nepal

 15

In Nepal "TejarathaAdda” started money transaction. It was used to give loans to the
employee. It was the first informal transition of the banking in Nepal. Nepal's formal
banking began in 1994 with the establishment of Siddhartha Bank Limited which was the
first commercial bank of Nepal. The government owned 51 percent of the shares in the
bank and controlled its operations to a large extent. Siddhartha Bank Limited was
headquartered in Katmandu and had branches in other parts of the country.

Nepal Rastra Bank (central bank of Nepal) was setup in 2013 and the Nepal Rastriya
Banijya Bank, a commercial bank was setup in 2022. In 2024 B.S, Agricultural
Development Bank was established to replace existing traditional farming system with a
more efficient system.

In 2041 B.S. the first joint venture investment bank, Nepal Arab Bank (Now Nabil Bank
Limited) was established. With the success of Nepal Arab Bank Limited, other
commercial banks like Nepal Investment Bank, Grind lays Bank (Now Standard
Chartered Bank), Himalayan Bank and others were also established. The government
introduced the liberal economic policy after the restoration of the democracy in 2047 B.S.
large financial institutions have been established.

Recently, the financial institutions have been classified into four types namely: Class A,
B, C, and D in Nepal. The commercial banks have been classified in Class A. there are 28
commercial banks at present.

Commercial Banks

Though bank can be categorized into different types on the basis of its functions,
objectives etc, the word ‘Bank’ will always be synonymous with the Commercial banks
and its functions. Basically, the functions are; various types of deposit facilities namely
current, saving and fixed; safety of public money, remittance of money, letter of credit,
guarantee, loans, lockers facility, foreign exchange, serving as agent of client, etc. The
commercial banks of Nepal also do all these functions under Bank and Financial
Institutions Act 2063. Main functions of Commercial banks are collection of the saving
 16

and the mobilization of the saving by providing credit to needy firms, industries or
people. All functions can be said as ancillary functions. Commercial bank is a profit
oriented financial service institution. Certain rate of interest is given tithe depositors.
Therefore, certain rate of interest is charged by the bank in the loan facility. Basic sources
of fund for commercial banks are capital (funds from shareholders), reserve (retained
profit) & various types of deposits. Basic uses of fund are loans, advances & investments.

Introduction of Nepal Investment Bank Limited (NIBL)

Nepal Investment Bank Ltd. (NIBL), previously Nepal Indosuez Bank Ltd.
Was established in 1986 as a joint venture between Nepalese and French
partners. The French partner (holding 50% of capital of NIBL) was Credit
Agricola Indosuez, a subsidiary of one of the largest group in the world.

With the decision of Credit Agricola Indosuez to divest, a group of companies

comprising of bankers, professionals , industrialist and businessmen, has acquired on
April 2002 the 50% shareholding of Credit Agricola Indosuez Bank Ltd.

The name of the bank has been changed to Nepal Investment Bank Ltd. upon approval of
Banker’s Annual General Meeting, Nepal Rastra Bank and Company Registers Office,
with the following shareholding structure.

Ø A group of companies holding 50% of the capital.

Ø Nepal Rastriya Banijya Bank holding of 15% of the capital.

Ø Rastriya Beema Sansthan holding the 15% of the capital.

Ø The remaining 20% held by the general public (which means that NIBL is a
company listed in the Nepal Stock Exchange.)

NIBL, which is a managed by a team of experienced bankers and professional having

proven track record, believe that it can offer the customers what they are looking for.
NIBL is sure that the customer’s choice of bank will be guided among other things by its
reliable team of management with a well defined hierarchy. Authority and responsibilities
 17

flow together from the top-level management. The Chairman/Chief Executive is

responsible for the controlling and decision making functions. The bank follows the
MBO (Management by Objective) approach.

NIBL offers various services to its customers. The services provided by NIBL are as
follows:

Ø Trade Finance,

Ø Remittance,

Ø Export Credit,

Ø Bills Purchase,

Ø Loans and Advances,

Ø Tele banking service,

Ø Locker Facilities,

Ø Debit Card

Ø Credit Card

Ø ATM facilities

Ø E- Banking etc.

NIBL as a reputed bank of Nepal has its branches in almost all the districts. Its head
office is in Durbar Marg, Kathmandu.

Nepal Investment Bank, one of the leading commercial banks of the country. This bank
has 46 branches, 86 ATM and 78 remittance centers across Nepal. The CEO of the Nepal
Investment Bank Limited is Mr. Prithivi Bahadur Panday. Besides all the function that
Nepal Investment Bank Limited (NIBL) performs, it is generally known for its remittance
services. It boasts of being one of the most dependable and the strongest center of money
transfer to Nepal.
 18

Concept of Financial Performance

The modern financial evaluation has greatly affected the role and importance of financial
performance. Nowadays, finance is best characterized as ever changing with new ideas
and techniques. Only efficient manager of the company can achieve the set up goals. If a
bank does not maintain adequate equity capital, it makes the bank more risky. If a bank
has inadequate equity capital, it must be used more debt that has high fixed cost. So any
firm must have adequate equity capital in their capital structure.

The main objectives of the bank are to collect deposits as much as possible from the
customers and to mobilize into the most profitable sector. If a bank fails to utilize its
collected resources it cannot generate revenue. Resource mobilization management of
bank includes resource collection, investment portfolio, loans and advances, working
capital, fixed assets management etc. It measures the extent to which bank is successful
to utilize its resources. To measure the bank performance in many aspects, we should
analyze its financial indicator with the help of financial statements. Financial analysis is
the process of identifying the financial strength and weakness of the concerned bank. It is
the process of finding strength and weakness of the concerned bank. It is the process of
finding details accounting information given in the financial statement.

It is performed to determine the liquidity, solvency, efficiency and profitability position

of an organization. The function or the performance of finance can be broken down into
three major decisions i.e. the investment decision, the financing decision, and the
dividend decisions. An optional combination of the three decisions will maximize the
value of the firm.

The financial performance of the commercial banks can be categorized on the basis of
assets, composition of assets, composition of liabilities, capital, deposit, loans and
advances, non banking assets, investment, earnings, and liquidity. The commercial banks
in Nepal are performing all financial functions to satisfy their customers. Since they are
the profit oriented organization, they focus only on urban area. So the large population
 19

living in the remote area is still away from the access of the service of the commercial
banks at present.

1.5.2 REVIEW OF RELATED STUDIES

Finance is a broad field and there are various books written in this subject. .

Joshi, Archana (2010) conducted a study on “A Comparative Study on Financial

Performance of Nepal SBI bank ltd & Nepal Bangladesh bank Ltd.” with the following
objectives.

Ø To highlight various aspects of relating to financial performance of Nepal

Bangladesh bank and Nepal SBI bank.
Ø To analyze various aspects of relating to financial performance through the use of
appropriate financial tools.
Ø To show the cause of change in cash position of the two banks. Through her
research she has presented the following findings of the study: -

The analysis of liquidity of these commercial banks shows different position here; the
average current ratio of NSBI is greater than that of NBBL. Therefore, the liquidity
position of SBI is in normal position. The turnover of the commercial banks is the main
indication of income generating activities. These ratios are used to judge how efficiently
the firm is using its resources. From the analysis of turnover of these banks, NBBL has
better turnover than NSBI in terms of loans and advances to total deposit ratio.

Adhikari(2013) conducted research on "A Comparative Study Of Financial Performance

Of NSBIBL and EBL" conclude that EBL is found superior regarding the liquidity,
quality assets they possessed and capital adequacy overall capital structure of NSBIBL
appears more levered than that on EBL. But NSBIBL is found superior in terms of
profitability and turnover comparatively interest remained more dominant in the total
income and expenses of NSBIBL than that of EBL. Regarding the test of hypothesis is (at
5% level of significance) the performance of the sampled banks significantly different
with respect to the ratios, loans and advances to saving deposit.
 20

Hossain, F. (2014) had conducted research on “Financial Performance Analysis of

Dhaka Bank Limited” in Bangladesh.

The main objectives of her thesis are:

Ø To provide a brief overview of Dhaka Bank and their historical background.

Ø To analyze the financial performance of Dhaka Bank Limited in the last three
years.(2010-2012)
Ø To present her observation and suggestion to the bank.
Ø To identify the strength and weakness of bank based on the financial performance
in the last three years. (2010-2012).

She has studied the financial performance of Dhaka Bank Ltd to conduct her research.
She had used financial means- liquidity indicator, cash ratio, interest spread ratio, total
assets turnover ratio, return on deposit, return on equity, leverage ratio, net profit margin
by taking the data of three years to analyze and draw the conclusion.

Islam, MD.A (2014) conducted a thesis on “An Analysis of the Financial Performance of
National Bank Limited Using Financial Ratio”. The objectives of the thesis are:

Ø To Discussed the Financial ratio measurement and analysis.

Ø To analyze National Bank trading recent years.
Ø To measure profitability, liquidity and credit management of National Bank.
Ø To show the financial stability analysis consists of (profitability and liquidity).
Ø To analyze the balance sheet and income statement.

He had used the financial tools, they are liquidity performance, profitability performance
etc. he had drown the findings as the net profit, profitability and credit management are
unsatisfactory and the liquidity position is satisfactory of the National Bank Ltd.

1.5.3 RESEARCH GAP

Research gap is the gap between previous research and study and this research.
Previous research is conducted on the basis of previous scenario and environment. Most
 21

of the previous studies are comparative study the two banks in Nepal. But I have
conducted the study of single bank, i.e. NIBL; this type of study is hardly done in Nepal.
Financial environment and the degree of competition in the banking sector has been
changed with the pace of time. New banking rules and the regulations have been
implemented by the central bank. New, innovative and advanced technologies have been
emerged. In this way, the time has brought many opportunities and threats to the
commercial banking sector. The changes in political, social and educational factors have
brought many risks to the performance of the banks. So in this research, new scenario is
taken into consideration. To evaluate the current financial performance and the status of
the commercial banks, NIBL is selected. Hence this study shows the unique features than
previous researches.

1.6 RESEARCH METHODOLOGY

Research methodology is the investigation tools of any certain area and it means clearly
observation of certain objective. Research is the process of systematic and in-depth study
or search for any particular topic, subject or area of investigation of relevant details or
data.

1.6.1 RESEARCH DESIGN

The research design is the conceptual framework within which a research task is
conducted. It specifies the process and the methods for defining the research problem and
data collection, their analysis and to draw conclusion. This report is conducted on
descriptive and analytical research design to accomplish the objective of the study. For
the study of the financial performance of NIBL, descriptive as well as analytical research
design has been used.

1.6.2 POPULATION AND SAMPLE

There are twenty eight commercial bank (Appendix 4) are operating in Nepal in
recent time. All of them are population for this study. Only one commercial bank is
 22

selected namely; Nepal Investment Bank limited as a sample out of twenty eight
commercial banks for the study. The data is collected from the sample bank only to
achieve the objective of the study.

1.6.3 SOURCES OF DATA

Secondary data are used for the purpose of the study. They are collected from official
publication of the bank. Also some data are gathered from websites, article, journals
related to the financial performance study pervious research reports etc. main sources and
the types of the data are:

Ø Annual report of the bank

Ø Financial report of the bank
Ø Various previous studies
Ø Reports published by the government and its agencies
Ø Others such as journals, articles etc

1.6.4 DATA COLLECTION AND PROCESSING PROCEDURE

The data collected from various sources cannot be deployed in the original form.
Therefore, for purpose of this study, the data have been rechecked, verified, edited.
Homogenous data have been classified and grouped and tabulated to make them
appropriate form for analysis. The data obtained from various sources are presented in
table, graphs and diagram to make the interpretation in the visual form. The data are
shown in the figure (tables, diagrams, and graphs) sequential way. The financial and the
statistical tools have been followed for the analysis and interpretation of the financial
performance of the selected bank.

1.6.5 DATA ANALYSIS TOOLS AND TECHNIQUE

There are various methods and the tools have been used to study the financial
performance of the sample bank. Accordance with the nature and the type of the data, the
descriptive and the analytical tools have been selected in this study. The financial and the
 23

statistical tools have used to study the financial performance (financial position) of the
sample bank.

Financial Tools

The financial tool is the means that is used to analyze the financial information or the
financial data. To meet the objectives of the study, some selected financial tools are used
to analyze the financial information or the data. The financial tools are explained below:

Liquidity Ratios

Liquidity is powerful tool to measure the ability of bank to meet its current obligation. It
means liquidity ratio is computed to check the short-term solvency of an enterprise. It
establishes the relationship between cash and other current assets to current liabilities and
its profit quick measure of liquidity. So, following Ratio can be computed to assess the
banks short-term solvency;

Current Ratio

Current Ratio Measures the firm’s Short-term solvency. It indicates the availability of
current assets in rupees for one rupee of current liability. The greater the ratio than one
indicate that the firm has more current assets in relative to the current liabilities.
Generally, 2:1 is Standard ratio but in the banking sector 1:1 is considered as the standard
ratio.

Cash and Bank to Current Liabilities Ratio

This ratio established a relationship between cash and bank balance and current
liabilities.

Leverage/ Solvency Ratios

Leverage ratios are calculated to evaluate the long term financial position of the firm. It
evaluates the financial risk. Debt is riskier but it is advantageous to shareholders.
Following ratios have been used to evaluate leverage ratio.

Debt to total Assets Ratio

 24

This ratio represents the basic relationship between debt and total assets. This ratio
describes what portion of debt is used in its overall capital structure. Greater the ratio,
higher the risk and vice versa that makes more difficult to raise fund from external
sources for the firm. This ratio shows the creditors claim on that firm’s total assets.

Debt Equity Ratio

This ratio expresses the relationship between borrowed funds and owners capital. It is
used to measure the financial risks of the firm and the creditors. The shareholders are safe
if this ratio is high.

Profitability Ratios

Profit means difference of revenue and the expenses over a period of time. In other
words, profit is ultimate output of firm or company. The profitability ratio is calculated to
measure the profitability and operating efficiency of the company. Besides management
of the company creditors and owners are also interested in the profitability of the firm.

Net Profit Margin

This ratio establishes a relationship between net profit after tax and sales (Total revenue)
of an enterprise. It indicates profit % in each rupee of sales into net profit. The higher the
ratio indicates higher operating efficiency and vice versa.

Return on Assets

This ratio measures the profit as percentage of total assets. In other words it is the ratio of
a firm’s net income after tax divided by its total assets. ROA is primarily an indicator of
managerial efficiency. It indicates how capably the management of the firm’s has been
converting the institution’s assets into net earnings. It can be calculated by dividing
NPAT by total assets.

Return on Shareholders’ Equity

 25

It is approximate net benefit that the stockholders have received from investing their
capital in the firm. It measures the rate of return flowing to the firm’s shareholders. The
ROE indicates how well the firm has used the resources of owners. The greater the ratio
is good for the organization.

Turnover Ratio

This ratio measures how effectively a firm is managing its deposits. Turnover ratio has
been used in this study to evaluate the efficiency of the utilization of the deposits. If this
ratio is high, efficiency of deposits utilization is better. Following ratios are used in
turnover ratio:

Loan and Advance to Deposit Ratio

This ratio shows the relationship between loan and advance to deposits.

Investment to Deposits Ratio

This ratio shows the relationship between investment and deposits.

Other Indicators

Other indicators include earning per share, book value per share and market value per
share. Higher the ratio or higher the value of these indicators shows better performance of
any organization.

Earnings per Share (EPS)

The Ratio measures the earning available to per share of common stock. This ratio
measures the profitability of the firm on a per equity share basis. EPS is computed by
dividing earning available to common share by no of equity share. And earning available
to common share can be calculated by subtracting tax and preferred dividend from profit
before tax. Higher the EPS indicates the good performance and vice versa.

Book Value per Share (BVPS)

 26

This ratio is computed by the profit distributed as equity divided by the number of equity
share. The higher the ratio is more attractive to the investors.

Market Value per Share (MPS)

This is the price per share of the equity share in the market. It is determined by the
demand and supply of shares of a firm in the secondary market of stock.

Statistical Tools

Some statistical tools are also used here to evaluate the performance of the bank
they are as follows;

Arithmetic Mean

It calculates the average of computed values. It helps to determine the average ratio for
different fiscal years that help to make comparison. It can be calculated by dividing sum
of computed values by total number of computation.

Standard Deviation

It measures the risk. Risk is the volatility of the variables. If standard deviation is high, is
means there is high risk and vice versa.

Coefficient of Variation

It shows the unit risk. It is relative risk associated with the computed values. It can be
calculated by dividing standard deviation of return by average return. It helps to identify
risk and consistency.

1.7 LIMITATION OF THE STUDY

This study is only focused in the financial performance of Nepal Investment Bank
Ltd. It gives the general idea of overall financial position of the NIBL.

Ø Only Nepal Investment Bank Ltd. is taken into consideration.

 27

Ø The study is mainly depended on secondary data.

Ø In this study, the data of latest five year (2012/12-2015/16) have been taken into
consideration.
Ø In this study, only selected the financial tools and the statistical tools are used.
Ø Due to the confidential nature of the banking sector, bank does not give the
correct or relevant information on some topics to maintain the privacy of the
bank. The report is mainly based on the financial statement published by the bank.
Ø This study is conducted only for the requirement of the partial fulfillment of
Bachelor Degree of Business Studies.
 28

CHAPTER – II

RESULTS AND FINDINGS

This chapter is concerned with the presentation and the analysis of the data. Already
mentioned methodologies and tables, diagram, and graphs have been used to present and
analyze the data. The data are presented in millions to reduce the difficulty in
computation.

2.1 FINANCIAL TOOLS

2.1.1 Liquidity Ratios

The liquidity ratios measure the abilities of bearing the short term obligation.

Current ratio

The current ratio shows the relation between current assets and current liabilities.

Current Ratio =

Cash and bank balance to current liabilities ratio

The cash and bank balance to current liabilities ratio shows the relationship between the
cash and bank balance and current ratio.

Cash and bank balance to current liabilities =

Current assets include cash and bank balance, balance with NRB and money at call and
other current assets. The current liabilities consist of bill payable, borrowings current
deposits and other current liabilities.
 29

Table 1: Table of Cash and Bank Balance Ratio and current Ratio

FY CA in C & B in CL in CR in times C&B/CL in

million million million times

2012/13 12009 11804 8108 1.5 1.4

2013/14 13520 13253 7542 1.8 1.7

2014/15 16977 16745 12654 1.3 1.3

2015/16 14315 14315 14017 1 1

2016/17 13175 13026 15664 0.8 0.7

Sources: -Annual Reports of NIBL

Figure 1: Trend of current Ratio and Cash and Bank Balance Ratio

1.7

1.5

1.3

1.1

0.9

0.7

0.5

0.3

0.1
2012/13 2013/14 2014/15 2015/16 2016/17
CR 1.5 1.8 1.3 1 0.8
C&B/CL 1.4 1.7 1.3 1 0.700000000000
001
 30

Above table and figure show that both the current ratio and the cash and bank balance to
current liabilities ratio have been increased from FY 2012/13 to 2013/14 from 1.5times to
1.8times and 1.4times to1.7 times respectively. After FY 2013/14 they have been
continuous decreased to FY 2016/17 from 2015/16. Since the standard ratio of Current
ratio is 1:1, the liquidity position of NIBL is satisfactory but in the FY 2016/17 the
liquidity position is not satisfactory as it is under the standard. The movement of cash and
bank balance to current liabilities ratio is as same as that of current ratio.

2.1.2 Leverage/ Solvency Ratios

The leverage ratios measure the long term obligation or the capital structure of the
bank.

Debt ratio

The ratio shows the relationship between debt and assets.

Debt Ratio =

Debt to equity Ratio

This ratio shows the ratio of debt and equity.

Debt to equity ratio =

Table 2: Table of Debt Ratio and Debt Equity Ratio

FY Assets Debt Equity DR (%) D/E in

times

2012/13 65756 59707 6049 90.8 9.87

2013/14 73154 66134 7020 90.4 9.87

2014/15 86174 78249 7925 90.8 9.87

2015/16 104345 94538 9804 90.6 9.64

 31

2016/17 129782 113494 16288 87.5 6.97

Source: -Annual report of NIBL

Figure 2: Trend of Debt Ratio

DR (%)

90

70

50

30

10

2012/13 2013/14 2014/15 2015/16 2016/17

DR (%) 90.8 90.4 90.8 90.6 87.5

The table 2 and the figure 2 show the movement of debt ratio indicator. The debt ratio of
NIBL over the sample period is in fluctuation trend. It has decreased from the FY
2012/13 (90.8%) to 2013/14 (90.4%). This ratio has continuously decreased from the FY
2014/15 to FY 2016/17 i.e. 90.8%, 90.6% and87.5% in the respected FY in this study.
 32

Figure 3: trend of debt equity ratio

Debt Equity Ratio in times

12

10 9.87 9.87 9.87 9.64

8
6.97
6

0
2012/13 2013/14 2014/15 2015/16 2016/17

Debt Equity Ratio in times

The table 2 and the figure 3 show debt –equity ratio of INBL of FY 2012/13 to FY
2016/17. The debt- equity ratio is constant to 9.87 times from the FY 2012/13 to FY
2014/15. After FY 2015/16, it is declined in the FY2015/16 (9.64 times) and FY 2016/17
(6.97 times).
 33

2.1.3 Profitability Ratios

Profitability can be measured as the discount rate that makes the present value of all
Future cash benefits equal to the amount invested. This rate of return does not reflect
The performance of the company but it reflects the discount rate investors apply to future
Cash flows in determining a price for the company’s stock. To measure the profitability
of the NIBL, I have used net profit margin, ROE and ROA.

Net Profit margin

Net profit margin =

Return on equity (ROE)

ROE =
Table 3: Table of Net Profit Margin, ROA & ROE

FY Net Assets (in Equity Total Net ROA ROE (%)

Profit (in millions ) (in Income Profit (%)
millions millions ) (in Margin
) millions ) (%)

2012/13 1039 65756 6049 6724 15.45 1.58 17.8

2013/14 1915 73154 7020 6783 28.23 2.62 27.28

2014/15 1940 76179 7925 6966 29.85 2.25 24.48

2015/16 1962 104345 9807 7013 27.98 1.88 20.01

2016/17 2550 122782 16288 8218 31.03 2.08 15.66

Source: -Annual Report of NIBL

Figure 3: Presentation of Net profit margin ROA & ROE
 34

ROA, ROE and Net profit margin in %

35

30

25

20

15

10

0
2012/13 2013/14 2014/15 2015/16 2016/17

Fiscal Year

Net Profit Margin(%) ROA (%) ROE (%)

The net profit margin of the bank in the sample years is in increasing trend. In the FY
2012/13 net profit margin is 15.45%. Andit is reached at 31.03% in the FY 2016/17. The
bank has performed better financial activities in the current period than the previous
period.

The return on equity (ROE) measures the return on the owner’s investment. The ROE of
NIBL shown in the table 3 and the figure 4 is in fluctuation trend. It is increased from the
FY 2012/13 to FY 2013/14 from 17.18% to 27.28%. The ROE is declined from the FY
2014/15 so it is reached at 15.66% in the FY 2016/17 from 24.48%. The trend of ROE
shows that the financial performance of the bank is satisfactory.

The return on assets (ROA) measures the return on total assets. The table 3 and figure 4
show that the ROA of the bank has no consistency. It is increased in FY 2013/14 from
FY 2012/13. In the FY, ROA is 1.58% and it is reached to 2.62% in FY 2013/14. During
the FY 2014/2015- 2015/15, the ROA has been decreased from 2.25% to1.88%. On the
basis of ROA, the return of the bank is low in the percentage.
 35

2.1.4 Turnover Ratio

Turnover ratio measure how and in where the collected deposits are used in. the
following ratios are computed.

Loan, Advance to Deposit Ratio

A commonly used statistic for assessing a bank's turnover by dividing the banks total
loans by its total deposits. This number, also known as the LTD ratio, is expressed as a
percentage. If the ratio is too high, it means that bank has transformed more collected
deposits into loan and advance and the bill payable.

LATD can be calculated as follows

LATD =

Investment to Deposit Ratio

It shows how much percentage the total collected deposits have been utilized in
investment. High ratio shows that the high portion of deposits is used in investment in
productive sectors

Investment to deposit Ratio =

.
 36

Table 4: Table of LATD & investment to deposit Ratio

FY Deposit Loan & Investment LATD (%) Investment

(million) Advance (million) to Deposit
(million) Ratio (%)

2012/13 57011 41637 10438 73.03 18.31

2013/14 62428 46400 11435 74.33 18.32

2014/15 73831 52019 15384 70.46 20.84

2015/16 90631 66219 21462 73.06 23.68

2016/17 108626 85461 29227 78.61 26.91

Source :-Annual Report of INBL

Figure 4: Presentation of LATD & investment to deposit ratio in %
90
80 78.61
73.03 74.33 73.06
70 70.46
60
50
40
30
26.91
20.84 23.68
20 18.37 18.32
10
0
2012/13 2013/14 2014/15 2015/16 2016/17

LATD Investment to Deposit Ratio

The above table and the figure show that the deposits, investment and loan, advance and
bills payable are increasing during the sample years. But the LTDR is in the fluctuation
trend. It is increased at 74% from 70% from the FY 2012/13 to FY 2014/15. Then it is
 37

increased to 78% in the FY 2016/17. But the investment to deposits ratio is in increasing
trend as 18.31%, 18.32%, 20.84%, 23.68% and 26.91%. The bank has used is deposits in
loan and advance and bills payable than investment but it is shown that the bank is
increasing the portion of deposits in investment in the last years.

2.1.5 Other indicators

To evaluate the position and performance of the bank, EPS, BVPS and MPS are
analyzed.

Earnings per Share

It is the return after tax per unit of share.

Book Value per Share

Book value per share is the rupees per share of book value of account.

Market value per share

The value of a share fixed by the demand and supply in the market is MPS
Table 5: Table of EPS BVPS & MPS

FY EPS (RS) BVPS (RS) MPS(RS)

2012/13 27.8 181 511

2013/14 46.2 169 784

2014/15 40.7 166 960

2015/16 30.8 155 704

2016/17 28.3 187 1040

Source:-Annual Report of NIBL

 38

Figure 6 : presentation of EPS, BVPS and MPS in rupees

1200

1040
1000
960

800 784
704
600
511

400

200 181 187

169 166 155

27.8 46.2 40.7 30.8 28.3

0
2012/13 2013/14 2014/15 2015/16 2016/17

EPS BVPS MPS

The EPS of the bank is fluctuating presented in the table and figure. In the FY 2012/13
EPS is Rs. 27.8. It is increased to Rs. 46.2% in FY 2013/14. After that FY, it has
continuously declined to Rs. 28.3 in FY 2016/17. Similarly BVPS of the bank is not
constant. It is decreased from Rs. 181 to Rs. 155 from the FY 2012/13 to FY2015/2016,
then is increased to Rs. 187 in the FY 2016/17. But MPS of the share of the bank is in
increasing trend as presented in the table and the figure.

2.2 STATISTICAL TOOLS

In this study, the statistical tools have been used to evaluate the return of the
sample bank. The average returns over the sample period, consistency or volatility in
return and their risk per unit of return are analyzed with the help of the statistical tools.

Mean

Mean =

Standard Deviation
 39

S.D. =

Coefficient of Variation

C.V.=

From Appendix-III
Table 6: Table for Mean, SD and CV of return

Mean Standard Deviation Coefficient of Variation

ROA (%) ROE (%) ROA (%) ROE (%) ROA (%) ROE (%)

2.08 20.9 0.3493 4.37 16.79 20.9

Figure 5: Presentation of Mean, SD and CV of return in %

Mean SD CV

25

20.9 20.9
20
16.79

15

10

5 4.37

2.08
0.349300000000004
0
ROA ROE

Above table and figure show the mean, standard deviation and coefficient of variation.
The mean of ROA, ROE and ROD are 2.08%, 20.9% and 2% respectively over the five
year period (FY 2012/13 to FY 2016/17). During this period the standard deviation of
 40

ROA, ROE and ROD are respectively 0.35%, 4.37% and 0.59%. Similarly the C.V. of
these variables is 16.79%, 20.91% and 29.35% respectively in the sample years. This
calculation shows the every unit of return on assets, equity and deposits are 16.79%,
20.9% and 29.35% risk respectively. There is high risk on deposits mobilization and low
risk on asset utilization shown by C.V. Similarly, the return is more consistency in assets.

4.3 MAJOR FINDINGS

The findings of the study are presented below:

Ø The volume of total assets, total deposits, loans and advances investment and the
net profit are increasing from the FY 2012/13 through the FY2016/17. It indicates
that the bank has increasing its coverage in the economic activities. It can be said
the bank is increasing efficiency in collection and transformation of the money.
Ø The liquidity position of the bank is satisfactory during the first four sample years
but at the FY 2016/17 the current ratio is less than 1. So in this FY the liquidity
position of the bank is low.
Ø The large portion of the assets is financed from the debt and from according to
debt ratio. If the cost of debt is high than the required rate of return, it would
reduce the actual rate of return. Otherwise it increased the return to the
shareholders.
Ø The debt equity ratio of the bank is in decreasing trend, so the bank is decreasing
the risk on debt financing position. The bank is not maintained the debt equity
position.
Ø ROA, ROE and NPM are in fluctuation trend. The trend of them show that the
bank is earning the return on the assets, equity and deposits, though the net profit
is in increasing trend.ROA and ROE are in decreasing after FY 2013/14.
Ø There is a proper use and efficiency of an asset. Firm’s assets have been used
properly for generating income. But in FY 2016/17, ROA is decreased. There is
not the proper utilization to generate the return.
 41

Ø Loan, advance to deposits ratio of the bank also in the increasing trend. Large
portion of the deposits have been mobilized in the loan advance to deposits.
Ø Other financial aspect such as EPS, BVPS and MPS are increasing they show the
good financial position of the bank.
 42

CHAPTER- III

DISCUSSION, CONCLUSION AND IMPLICATIONS

3.1 DISCUSSION

The root of economic development of a country is the development of the

commerce and industries. There is no debate that the banking sector leads to the
development of the nation without banking sector there is no expectation of the
development of economic environment of the country. The banking sector involves the
circulation of the money. They create the credit in the monetary system. The banking
sector plays the vital role for the rapid development of the economy of the nation.

The history of the banking sector in Nepal is not so long period, almost seven decade.
After the announcement of the liberal and free market economy based policy, the banks,
and financial sectors used to expand their networks in Nepal. Many financial institutions
have been established and operating in current time. NRB has implemented many rules
and the policies to maintain them.

NIBL is the leading bank of the Nepal and has contributed its services in each and every
sector of the country. This bank has been providing the quality banking service and the
money transfer service such as trade finance, remittance export credit; bills purchase loan
and advance, locker facilities, credit card, debit card, AYM facilities E-banking etc. to its
customers from the very first day of its establishment. Human resource of the bank is
highly motivated, trained and committed staffs. It has been playing the great role in
development of the country and assisting international trade by its efficient and effective
transaction following the improved technology of processing. Recently, NIBL had launch
RS 1account future; i.e. we can open saving account in only Rs1. The number of
 43

employees increases due to expansion of banking transaction and its branches. In

comparison to others bank the employee turnover rate has become almost zero.

Nepal investment Bank has trying its best to carter its services to the customers on the
most convenient way possible. As its slogan states, it is an internationally recognized
bank and has number of correspondents all over the world helping in the payment and
settlement of the transactions globally. Apart from these, there are innumerous modes of
payment found to be used by this bank.

With some expansions of the banking system and introductions of new technology in
payment and settlement system, efficient computer software has been essential for fast
and efficient clearing house transactions. The prevailing traditional and manual mode of
operations in NIBL will not suffice for the growing volume of transactions. There is a
strong demand from the commercial sector for improved payment facilities. Thus, for
Meeting the growing demand for the banking sectors, there is a need for automation in
the payment and settlement system in the country.

This study is conducted to analyze the financial performance of NIBL. The financial
performance is studied on the basis of liquidity, leverage, turnover, profitability and other
indicators such as EPS, BVPS and MPS by deploying the financial and statistical tools.
The secondary data are taken to conduct the research. In this study, the tables, graphs,
and diagrams have been used to present and evaluate the data to make the easy for
readers to understand and memorize them. The financial tools such as liquidity ratios,
leverage ratios, turnover ratios, profitability ratios and statistical tools such as mean,
standard deviation and coefficient of variation have been used.

5.2 CONCLUSION:

From above mentioned findings, the following conclusions can be drawn:

Ø After seeing the balance sheet, profit and loss account (appendices 1and 2), assets,
deposits, net profits, equity and loan advance are in increasing trend. So we can
 44

say that the management is efficient.

Ø The bank has the enough liquidity to maintain the short-term liabilities, since the
bank has around the standard ratio but in the fiscal year 2016/17 is poor according
to liquidity ratios.
Ø The debt ratio is in fluctuating trend and the debt equity ratio of the bank is in
decreasing trend. So the bank is not maintained the capital structure of the bank.
Ø The debt ratio of the bank is constant but in the last year of the sample years it
decreased. The debt equity ratio is in decreasing trend. The bank has decreased
the risk on equity.
Ø Since the net profit of the bank is in the increasing trend, profitability of the bank
is satisfactory. NPM, ROA and ROE of the bank are in fluctuation trend. The
ROA and ROE are declining from the FY 2013/14. It shows that there is not
proper utilization of assets and equity and it indicates the inefficiency of the bank.
Ø The performance of the bank in view of turnover is satisfactory because the both
LATD and investment to deposits ratio are in increasing trend. The management
of the bank is efficient.
Ø Other indicators (EPS, BVPS and MPS) are increasing so the management of
bank is said to be efficient.
Ø Overall, the performance of the bank is good. Increase in total assets, deposits,
loan ad advance, share capital, net profit, etc. show the expansion and increase in
the coverage of the bank and exploitation of the market.

5.3 IMPLICATIONS

The NIBL is one of the leading commercial bank of Nepal among all the financial
institutions. The strongest aspect of the bank is the highly increase in the deposits
collection and its utilization. There is continuous increase in the total assets, deposits,
investment, loan and advance, shareholders equity and net profit. Increasing trend of
turnover ratio, decreasing trend of debt equity ratio, increasing trend of EPS, BVPS and
 45

MPS, low variability of ROA and ROE depict the efficient management of the bank.
However the liquidity opposition, utilization of assets to generate the income and highly
use of debt, return by utilizing the contribution of the shareholder are still unsatisfactory.
Hence the bank should avoid these deficiencies to improve the management of the bank. I
recommend the following points to improve:

Ø Different strategy and policy for liquidity management should be introduced as

per the requirement for the bank since the bank in the FY 2016/16 is poor. Current
assets must be increased to meet the current obligation of the bank.
Ø The bank should invest their fund to in various sectors. The NIBL is
recommended to purchase more financial assets issued by other financial
institutions not giving priority on the government securities. The bank should
invest the fund to make proper portfolio. The government securities provide low
return with low risk but other securities provide high interest with high risk.
Ø The profitability is the main indicator of financial performance of the firm. The
profitability position of the bank is good since net profit is increasing. However,
there is decreasing in ROA and ROE. The bank is able to earn on assets and
shareholders fund. So the bank should increase the interest earning capacity by
investing more funds in loan and advances and in different types of securities.
Ø The bank is focusing only on urban area. The remote area’s people do not get the
service of the bank and hence there is not enough volume of deposits collection.
The activities should be expanded in the remote area too so as to collect the large
deposits.
Ø The main source of income of the bank is interest income. So the interest on loan
and advanced should be fixed carefully by considering the demand and supply of
the fund. The bank also should consider the interest on deposits. It reduces the
fluctuation of return,
Ø The promotional activities should be done to increase the public awareness about
the banking that increases the knowledge of people and leads to rapid economic
development.
 46

Ø The technological environment is dynamic so the bank should adopt the new and
the innovative technologies to cope with the dynamic environment, to compete in
global environment.
 47

Bibliography

(n.d.). Retrieved 2017, from NIBL: http://www.nibl.com.np

(n.d.). Retrieved 2017, from Nepal Rastra Bank: http://www.nrb.org.np

Adhikari, D. &. (2016). Business Research Methods. Kathmandu: Asmita Books

Publishers and Distributers (P) Ltd.

Bhandari, D. R. (2003). Banking & Insurance (Principle & Practices). Kathmandu:

Aayush Publication.

Bhandari, D. R. (2003). Banking & Insurance (Principle & Practices). Kathmandu:

Aayush Publication.

Dangol, R. &. (2058). Accounting for Financial Analysis Planning. Kathmandu: Taleju
Publication.

Nepalstock. (n.d.). Retrieved 2017, from http://www.nepalstock.com.np

Panta, P. (n.d.). Fundamentals of Business Research Methods. Kathamandu: Buddha

Academic Enterprises.

Paudel, R. a. (n.d.). Fundamentals of Investment. Kathamandu: Asmita Books publishers

and Distributers (P) Ltd.

Sharma, P. S. (2063). Business Mathematics and Statistics. Kathmandu: Taleju

Publication.
 48

APPENDIX
Table 1: Table of Cash and Bank Balance Ratio and current Ratio

FY CA in C & B in CL in CR in times C&B/CL in

million million million times

2012/13 12009 11804 8108 1.5 1.4

2013/14 13520 13253 7542 1.8 1.7

2014/15 16977 16745 12654 1.3 1.3

2015/16 14315 14315 14017 1 1

2016/17 13175 13026 15664 0.8 0.7

Sources: -Annual Reports of NIBL

Table 2: Table of Debt Ratio and Debt Equity Ratio

FY Assets Debt Equity DR (%) D/E in times

2012/13 65756 59707 6049 90.8 9.87

2013/14 73154 66134 7020 90.4 9.87

2014/15 86174 78249 7925 90.8 9.87

2015/16 104345 94538 9804 90.6 9.64

2016/17 129782 113494 16288 87.5 6.97

Source: -Annual report of NIBL

Table 3: Table of Net Profit Margin, ROA & ROE

FY Net Profit Assets Equity Total Net Profit ROA ROE

 49

(in (in (in Income Margin (%) (%)

millions ) millions millions ) (in (%)
) millions )

2012/1 1039 65756 6049 6724 15.45 1.58 17.8

3

2013/1 1915 73154 7020 6783 28.23 2.62 27.28

4

2014/1 1940 76179 7925 6966 29.85 2.25 24.48

5

2015/1 1962 104345 9807 7013 27.98 1.88 20.01

6

2016/1 2550 122782 16288 8218 31.03 2.08 15.66

7

Source: -Annual Report of NIBL

Table 4: Table of LATD & investment to deposit Ratio

FY Deposit Loan & Investment LATD (%) Investment

(million) Advance (million) to Deposit
(million) Ratio (%)

2012/13 57011 41637 10438 73.03 18.31

2013/14 62428 46400 11435 74.33 18.32

2014/15 73831 52019 15384 70.46 20.84

2015/16 90631 66219 21462 73.06 23.68

 50

2016/17 108626 85461 29227 78.61 26.91

Source :-Annual Report of INBL

Table 5: Table of EPS BVPS & MPS

FY EPS (RS) BVPS (RS) MPS(RS)

2012/13 27.8 181 511

2013/14 46.2 169 784

2014/15 40.7 166 960

2015/16 30.8 155 704

2016/17 28.3 187 1040

Source:-Annual Report of NIBL